Bloomberg News

Oil Trades Near Six-Week High as Investors Bet Storms Cut Supply

September 13, 2011

Sept. 14 (Bloomberg) -- Oil traded near a six-week high in New York as investors speculated that storm disruptions in the Gulf of Mexico reduced supplies in the U.S., the world’s biggest crude consumer.

Futures swung between gains and losses after the American Petroleum Institute said crude stockpiles fell the most in five weeks during the seven days ended Sept. 9. An Energy Department report today may show they slipped 3 million barrels as Tropical Storm Lee shut output in the Gulf. Maria, the 14th named storm of the Atlantic hurricane season, gained speed on a path that may take it toward refineries in Canada.

“When you’re in a fairly tight supply situation to begin with, these temporary disruptions have an impact,” Ric Spooner, a chief market analyst at CMC Markets in Sydney, said by telephone today.

Crude for October delivery was at $90.01 a barrel, down 20 cents, in electronic trading on the New York Mercantile Exchange at 11:26 a.m. Sydney time. The contract yesterday advanced $2.02 to $90.21, the highest close since Aug. 3. Prices are 17 percent higher the past year.

Brent oil for October settlement rose 31 cents, or 0.3 percent, to $112.20 a barrel on the London-based ICE Futures Europe Exchange. The European benchmark contract’s premium to U.S. futures was at $22.19, compared with a record close of $26.87 on Sept. 6.

Lee, Maria

Lee, which made landfall Sept. 4 in Louisiana, reduced output by as much as 858,935 barrels a day after companies evacuated workers from more than a third of offshore platforms and rigs, the Bureau of Ocean Energy Management, Regulation and Enforcement said on its website.

Maria with top winds of 50 miles (80 kilometers) per hour, was traveling north at 8 mph, according to an advisory at about 7:30 p.m. Eastern time yesterday by the U.S. National Hurricane Center. Bermuda issued a tropical storm warning, meaning storm conditions are expected in the area within 36 hours.

Energy assets in the storm’s possible path include Imperial Oil Ltd.’s 82,000-barrel-a-day Dartmouth refinery in Nova Scotia and Korea National Oil Corp.’s 115,000-barrel-a-day Come By Chance refinery in Newfoundland.

--Editor: Paul Gordon

To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at akwiatkowsk2@bloomberg.net


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