Oil traded near the lowest level in two weeks on speculation Tropical Storm Isaac’s impact on output in the Gulf of Mexico will be limited. Gasoline was near a four-month high amid a fire at Venezuela’s biggest refinery.
West Texas Intermediate futures were little changed in New York after dropping a third day yesterday, the longest losing streak since June. Isaac was near hurricane strength as it headed for the Gulf coast, according to the National Hurricane Center. Storage tanks burned for a fourth day at Venezuela’s 645,000 barrels-a-day Amuay plant, where an Aug. 25 gas explosion killed 48 people. Oil has pared gains before a U.S. Federal Reserve symposium in Jackson Hole, Wyoming, on Aug. 31.
“It seems likely now that Isaac won’t be doing any lasting damage to oil facilities in the Gulf,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “Buyers seem reluctant to take prices too much higher from here until they get further detail” on what the Fed might do to boost economic growth, he said.
Oil for October delivery was at $95.35 a barrel, down 12 cents, in electronic trading on the New York Mercantile Exchangeat 4:46 p.m. Sydney time. The contract yesterday fell 68 cents, or 0.7 percent, to $95.47, the lowest close since Aug. 15. Prices are 3.5 percent lower this year.
Brent oil for October settlement was at $112.27 a barrel, up 1 cent, on the London-based ICE Futures Europe exchange. The European benchmark grade’s premium to WTI was at $16.92, from $16.79 yesterday.
Isaac’s center was about 145 miles (235 kilometers) southeast of the mouth of the Mississippi River with top winds of 70 miles per hour, the National Hurricane Center said in an advisory at 2 a.m. in Miami. That’s 4 mph less than hurricane intensity. It was moving northwest at 12 mph and is forecast to strengthen before approaching southeastern Louisiana and Mississippi today, the center said.
The storm halted about 78 percent of oil output and 48 percent of natural-gas production in the Gulf and forced evacuations from 346 production platforms and 41 rigs, the Bureau of Safety and Environmental Enforcement said yesterday. Four refineries in Louisiana were shut, idling combined capacity of 832,700 barrels a day, or 4.8 percent of the U.S. total, and at least four are running at reduced rates.
The region accounts for 23 percent of U.S. oil output and 7 percent of natural gas production, according to the U.S. Energy Department in Washington.