Brent holds near US$55
Oil finds support as refiners delay work after Hurricane Harvey
HONG KONG: Oil held gains near US$50 a barrel before US crude stockpile data as refiners delay scheduled maintenance after Hurricane Harvey hit the Gulf Coast and shuttered almost a quarter of the nation’s refining capacity.
Futures were little changed in New York after closing two cents higher on Monday. The largest US plant operated by Motiva Enterprises LLC in Texas is said to have pushed back work on a unit to April from September, while others churn out more fuel to take advantage of strong margins.
American crude stockpiles probably rose by three million barrels last week, according to a Bloomberg survey before an Energy Information Administration report on Wednesday.
While oil has rebounded the past two weeks, prices have struggled to hold above US$50 a barrel this year as rising US output stifles supply curbs led by members of the Organization of Petroleum Exporting Countries (Opec).
Caribbean islands still recovering from Irma are bracing for a third hurricane strike in two weeks, as Maria tracks toward the US coast.
“The bullish trend for oil should continue, especially on the renewed demand outlook for the year ahead,” said Barnabas Gan, an economist at Oversea-Chinese Banking Corp in Singapore, referring to a recent boost in consumption forecasts from Opec and the International Energy Agency.
West Texas Intermediate for October delivery, which expires Wednesday, fell nine cents to US$49.82 a barrel on the New York Mercantile Exchange at 1:38 pm in Hong Kong.
Total volume traded was about 28% below the 100-day average. Prices closed at US$49.91 on Monday after settling unchanged on Friday.
Brent for November settlement lost 15 cents to US$55.33 a barrel on the Londonbased ICE Futures Europe exchange. Prices fell 14 cents to US$55.48 on Monday.
The global benchmark traded at a premium of US$5.10 to November WTI.
At least 13 refineries from Louisiana to Montana have delayed maintenance for weeks or months, according to company statements and people familiar with the situations.
While some companies are making the most of better margins, others simply don’t have the personnel because workers were dispatched to help repair and restart storm- hit facilities along the Gulf of Mexico.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI crude and the nation’s biggest oil-storage hub, rose by 900,000 barrels last week, according to a forecast compiled by Bloomberg.
Saudi Arabian crude shipments dropped in July to their lowest level in almost three years, according to information that the country submitted to the Joint Organisations Data Initiative.