Oil rose as Hurricane Irma weakened after hitting the Florida coast and as Gulf Coast refining continued to recover following storm Harvey.
Futures added 0.9 percent in New York after falling 3.3 percent on Friday. The intensity of Irma’s top winds have dropped to 105 miles (169 kilometers) per hour after making landfall Sunday as a Category 4. About 6 percent of U.S. refining capacity remains shut after almost a quarter of the nation’s capacity was halted following Hurricane Harvey more than two weeks ago.
Oil slipped on Friday by the most in more than two months amid speculation that Irma may crimp demand for gasoline and other transportation fuels. While Gulf Coast crude imports fell to the lowest in records going back to 1990 after Harvey, refineries, pipelines and offshore platforms are resuming operations.
“One of the reasons we’re seeing support is because of that dramatic fall we saw Friday,” said Michael McCarthy, a chief strategist at CMC Markets in Sydney. “Prices still remain in the middle of the range. We’re looking for the market to move back into balance and oil will probably break through the $50 mark, but that doesn’t seem likely in the short term.”
West Texas Intermediate for October delivery was at $47.89 a barrel on the New York Mercantile Exchange, up 41 cents, at 7:50 a.m. in London. Total volume traded was about 11 percent below the 100-day average. Prices slid $1.61 to close at $47.48 on Friday, the most since July 5.
Brent for November settlement gained 33 cents, or 0.6 percent, to $54.11 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $5.64 to November WTI.
Irma has knocked out power to 4.5 million customers, paralyzed tanker traffic and shut about 6,000 gasoline stations. As the storm heads up Florida’s west coast, it’s also threatening more than $1 billion worth of crops.
Saudi Arabian Oil Co. will provide the full contracted crude supply for October to at least five north Asian refiners and one customer in the southeast, according to people with knowledge of the matter.