By Michael Kitchen, MarketWatch
LOS ANGELES (MarketWatch) — U.S. benchmark oil futures ticked lower in electronic trade Tuesday, extending their Monday decline, as refinery shutdowns from Tropical Storm Isaac eased demand.
Crude for October delivery CLV2 +0.57% dropped 6 cents, or 0.1%, to $95.41 a barrel during Asian trading hours, adding to a 0.7% loss during the regular New York Mercantile Exchange session.
Isaac was forecast to grow into a Category 2 hurricane as it moved through the Gulf of Mexico toward the southern U.S.
But while the region accounts for an estimated 44% of U.S. refining capacity, it held a smaller 23% of U.S. crude-production capacity, meaning the threat to refinery demand outstripped the threat to supply.
“In other words, while crude-oil supply may be reduced by the storm, refinery consumption of crude oil may be reduced even more, with a bearish impact on crude-oil prices overall,” said analysts at Citi Futures.
However, the refinery shutdowns — which already include about 8% of output, or 1.3 million barrels a day, according to U.S. Department of Energy figures — helped support gasoline prices.
September gasoline futures RBU2 +0.49% rose 0.1% to $3.16 a gallon in early Tuesday trading, after reaching their highest settlement since April on Monday.
Among other energy futures, heating oil for September delivery HOU2 +0.79% added a penny to its 1-cent advance Monday to trade at $3.12 a gallon, while natural gas for September NGU2 -1.02% was little changed at $2.65 per million British thermal units.
Michael Kitchen is Asia editor for MarketWatch and is based in Los Angeles.
