Oil Holds Near $50 as Refiners Delay Work After Hurricane Harvey

19/09/2017 10:47 AST

Oil held gains near $50 a barrel before U.S. 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 2 cents higher Monday. The largest U.S. 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 3 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 $50 a barrel this year as rising U.S. output stifles supply curbs led by members of the Organization of Petroleum Exporting Countries. Caribbean islands still recovering from Irma are bracing for a third hurricane strike in two weeks, as Maria tracks toward the U.S. 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, rose 11 cents to $50.02 a barrel on the New York Mercantile Exchange at 7:45 a.m. in London. Total volume traded was about 3 percent below the 100-day average. Prices closed at $49.91 on Monday after settling unchanged on Friday.

Brent for November settlement added 3 cents to $55.51 a barrel on the London-based ICE Futures Europe exchange. Prices fell 14 cents to $55.48 on Monday. The global benchmark traded at a premium of $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.

Bloomberg