Oil trades near 3-day high as refineries resume
Oil traded near the highest level in three days in New York as U.S. East Coast refineries resumed operations in the aftermath of Atlantic superstorm Sandy, increasing crude demand.
West Texas Intermediate futures were little changed after rising 0.7 percent yesterday.
East Coast refineries accounting for 76 percent of the 1.29 million barrels a day of capacity in Sandy's path have restored operations or are in the process of doing so. Price gains stalled before an Energy Department report today that may show U.S. crude stockpiles rose to the highest level in three months ahead of the storm.
"Refineries are getting back online quickly, so clearly that is going to remove some of that concern about a temporary oversupply," said Michael McCarthy, a chief market strategist at CMC Markets in Sydney. "I'm expecting further pressure on prices in the next week or so from inventory builds."
Crude for December delivery was at $86.32 a barrel in electronic trading on the New York Mercantile Exchange, up 8 cents, at 9:34 a.m. in London. Prices gained 56 cents yesterday to $86.24, the highest close since Oct. 26. Futures are down 13 percent this year.
Brent oil for December settlement on the Londonbased ICE Futures Europe exchange was at $108.44 a barrel, down 26 cents. The contract earlier dropped as much as 0.5 percent and has fallen the past three days. The European benchmark crude was at a $22.15 premium to WTI, from $22.46 yesterday.
"Expectations of a quick refining comeback seem to be justified, and you may ultimately see demand in the U.S. Northeast affected more than supply," Torbjoern Kjus, a senior oil analyst at DNB ASA in Oslo, said by phone.
PBF Energy Inc.' s Delaware City, Delaware, and Paulsboro, New Jersey, refineries were operating normally yesterday, according to recorded community hotline messages. The plants, with a combined capacity of 367,200 barrels a day, ran at reduced rates throughout the storm.
NuStar Energy LP (NS)'s 74,000 barrel-a-day Paulsboro asphalt facility in New Jersey was returning to service and is expected to be back to full production by today, according to a statement posted on the company's website Oct. 30.
Delta Air Lines Inc.'s Monroe Energy LLC 185,000 barrel- a- day Trainer, Pennsylvania, refinery was operating normally, the Energy Department said yesterday. Trebor Banstetter, an Atlantabased spokesman for Monroe, didn't respond to an e-mail about the status of the plant.
Restarts in New Jersey at Phillips 66's 238,000 barrel-aday Bayway plant in Linden and Hess Corp. 70,000 barrela-day Port Reading facility are contingent on post-storm assessments, the companies said Oct. 30. Phillips reported flooding at Linden and said yesterday the refinery regained power.