BS: Oil Falls on Speculation Sandy Shutdowns Will Bolster
Oil in New York fell for the first time in four days on speculation that the shutdown of refineries on the U.S. East Coast because of Hurricane Sandy will add to already ample stockpiles.
Futures declined as much as 1 percent as Phillips 66 and Hess Corp.’s New Jersey refineries remain shut four days after the storm struck. Crude pared losses on a report showing that hiring in the U.S., the world’s biggest crude-consuming country, rose more than forecast in October.
“Hurricane-related disruptions of refineries are weighing on the oil market,” said Jason Schenker, president of Prestige Economics LLC, an Austin, Texas-based energy consultant. “We could see a big inventory build in next week’s report because of the storm’s impact.”
Crude oil for December delivery fell 82 cents, or 0.9 percent, to $86.27 a barrel at 9:48 a.m. on the New York Mercantile Exchange. Prices are down 13 percent this year.
Brent oil for December settlement rose 9 cents to $108.26 a barrel on the London-based ICE Futures Europe exchange.
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.
Jobs Growth
Prices rallied after Labor Department figures showed an improving U.S. employment picture. In the last jobs report before next week’s election, a net 171,000 workers were added to payrolls after a 148,000 gain in September that was more than first estimated. An advance of 125,000 was expected, according to the median forecast of economists surveyed by Bloomberg.
The jobless rate rose to 7.9 percent from 7.8 percent as more people entered the labor force, the figures showed.
“The employment numbers were much better than expected,” Schenker said. “The impact on the markets will probably be muted because of concerns about the election next week.”
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.
