BLBG:Oil Trims Weekly Advance as U.S. Refineries Remain Shut
Crude fell for the first time in four days in New York, almost erasing this week’s gain, as two refineries on the U.S. East Coast remained shut after Hurricane Sandy and the nation’s unemployment rate was forecast to rise.
Futures declined as much as 1 percent after advancing the most in three weeks yesterday. Phillips 66 and Hess Corp. (HES)’s New Jersey refineries were still not operating four days after the Atlantic superstorm struck. The U.S. jobless rate probably gained for the first time in three months, according to a Bloomberg survey before government data today. Euro-area manufacturing output contracted in October, adding to signs a recession in the currency bloc may extend into next year.
“With refinery shutdowns there’s less crude demand, and so there’s a negative impact,” said Gareth Lewis-Davies, an analyst at BNP Paribas SA in London.
Crude for December delivery fell as much as 91 cents to $86.18 a barrel in electronic trading on the New York Mercantile Exchange and was at $86.35 at 11:16 a.m. London time. It advanced 85 cents to $87.09 yesterday, the highest close since Oct. 22.
Brent for December settlement was at $107.84 a barrel, down 33 cents, on the London-based ICE Futures Europe exchange. The European benchmark crude grade was at a $21.49 premium to West Texas Intermediate. The gap narrowed by the most in the two weeks yesterday, shrinking $1.38 to $21.08.
Refinery Restarts
The resumption of operations at the Phillips 66 and Hess refineries, which have a combined capacity of 308,000 barrels a day, are contingent on post-storm assessments, according to the companies. Both were closed before Sandy hit and lost power after the storm made landfall Oct. 29 in southern New Jersey. Phillips reported flooding in low-lying areas at Linden and said Oct. 31 the refinery regained power.
“The steam has really come off the oil market,” Soozhana Choi, the head of Asia commodities research at Deutsche Bank AG in Singapore, said in an interview on Bloomberg Television’s “On the Move Asia.” There’s “a lot of concern in the market that you’re going to see a dampening effect on economic activity because of the storm, and consequently oil demand,” she said.
In the last employment report before next week’s U.S. election, the jobless rate for October climbed to 7.9 percent from 7.8 percent in September, according to the median forecast of 91 economists surveyed by Bloomberg. Payrolls grew by 125,000 workers last month following a 114,000 gain, the survey showed.
A gauge of manufacturing in the 17-nation euro area fell to 45.4 from 46.1 in September, snapping two months of advances, London-based Markit Economics said today. That compares with an initial estimate of 45.3 published on Oct. 24. A reading below 50 indicates contraction.
To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net
