BLBG:Oil Trades Near Four-Month Low as Storm-Hit Refineries Stay Shut
Oil traded near the lowest level in almost four months in New York as refineries in New Jersey remained shut, curbing demand for crude a week after Atlantic superstorm Sandy struck the U.S. East Coast.
Futures were little changed after falling 2.6 percent on Nov. 2 to cap a third weekly decline. Hess Corp. (HES)’s Port Reading refinery won’t resume operations until after full power has been restored, which will take several days, and Phillips 66’s Bayway plant stayed shut for repairs, the companies said yesterday. Economic reports this week may signal a slowing global economy.
“The impact of Sandy may be quite a regional matter, but all over the world we still have plenty of crude, so the oil market remains in a downtrend,” said Ken Hasegawa, an energy trading manager at Newedge Group in Tokyo who predicts New York futures will drop to $80 a barrel by the end of November. “There’s also a lot of uncertainty over the economy, so we may not be so optimistic.”
Crude for December delivery was at $85.09 a barrel, up 23 cents, in electronic trading on the New York Mercantile Exchange at 2:50 p.m. Singapore time. The contract slid 1.7 percent last week to $84.86 a barrel, the lowest close since July 10. Prices have lost 14 percent this year.
Brent oil for December settlement on the London-based ICE Futures Europe exchange was up 17 cents at $105.85 a barrel. The European benchmark crude was at a premium of $20.76 to New York- traded West Texas Intermediate grade. The spread narrowed for a fourth day on Nov. 2 to $20.82.
Crude Stockpiles
Power was partially restored at Hess’s 70,000 barrel-a-day Port Reading refinery, Lorrie Hecker, a company spokeswoman, said in an e-mail. Power has been restored to Phillips’s 238,000 barrel-a-day Bayway plant, which is closed as the company makes repairs, Rich Johnson, a Houston-based spokesman, said in a phone interview. Both facilities shut before Sandy hit and lost power after the storm made landfall Oct. 29 in southern New Jersey.
U.S. crude inventories exceeded 370 million barrels in the last week of October before Sandy left a swath of devastation across much of New Jersey, Energy Department data show. That’s the highest for this time of year in at least 30 years.
A final index of manufacturing and services in the euro area probably fell to 45.8 in October, the lowest in more than three years and matching the preliminary reading, according to a Bloomberg News survey before a report tomorrow by Markit Economics. A measure below 50 signals contraction.
The Institute for Supply Management’s non-manufacturing index, which covers almost 90 percent of the U.S. economy, was at 54.5 last month, from 55.1 in September, according to the median forecast of economists surveyed before the data today.
Chart Support
Oil in New York has technical support along its lower Bollinger Band, around $84 a barrel today, according to data compiled by Bloomberg. Futures last week halted their decline after reaching this indicator, signaling buy orders may be clustered closed to it.
Hedge-fund managers and other large speculators reduced their net-long positions in crude to the lowest in almost five months in the week ended Oct. 30, according to the Commodity Futures Trading Commission. Managed-money bets that prices will increase outnumbered so-called short positions by 122,863 futures and options combined, the Washington-based regulator said in its weekly Commitments of Traders report on Nov. 2. Net- long positions fell by 15,477 contracts, or 11 percent, from a week earlier.
To contact the reporter on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
