Oil held gains near $48 a barrel as Hurricane Irma weakened further after moving inland and as Gulf Coast refining continued to recover following two strikes from Harvey.
Futures were little changed in New York after rising 1.2 percent Monday. Irma has softened to a tropical depression as it moves north after dumping heavy rain across Florida and cutting power to millions of people. Meanwhile, refiners closed by Hurricane Harvey more than two weeks ago continue to restart, including the nation’s largest, operated by Motiva Enterprises LLC.
The hurricanes have rattled energy markets, with Irma shutting Florida fuel stations and ports and Harvey earlier halting about one-quarter of the nation’s refining capacity. Goldman Sachs Group Inc. forecasts the two storms will initially impact crude demand by about 600,000 barrels a day, though the recovery will likely raise consumption and offset that loss.
“There’s a little bit of uncertainty around Hurricane Irma and the impact it’s going to have,” said Daniel Hynes, a Sydney-based analyst at Australia & New Zealand Banking Group Ltd. “That’s resulting in prices remaining stuck around current levels. We are expecting prices to push up into the high $50s by the end of the year, probably not breaching $60 till early next year.”
West Texas Intermediate for October delivery was at $48.04 a barrel on the New York Mercantile Exchange, down 3 cents, at 7:45 a.m. in London. Total volume traded was about 14 percent below the 100-day average. Prices rose 59 cents to $48.07 on Monday.
Brent for November settlement slid 7 cents to $53.77 a barrel on the London-based ICE Futures Europe exchange after gaining 6 cents on Monday. The global benchmark crude traded at a premium of $5.20 to November WTI.
Irma made landfall Sunday as a Category 4 storm, battering Miami before beginning its march up the coast as its fury began to dissipate. Seven million utility customers across the U.S. are without power and the storm is forecast to drop 8 to 15 inches of rain in its wake in parts of northern Florida.
Saudi Arabia says it’s open to another extension of output cuts after meeting with oil ministers from Venezuela, Kazakhstan and the United Arab Emirates in the Kazakh capital of Astana. Iraq’s SOMO said it needs more time to study a proposed oil-pricing methodology for sales to Asia before it can be implemented, according to traders who received a notification from the state-run company.