Oil fell and gasoline fluctuated as an industry report showed that U.S. crude supplies surged the most in three months and Hurricane Isaac made landfall, ending the threat to offshore platforms and rigs in the Gulf of Mexico.
Futures slipped as much as 0.9 percent after the American Petroleum Institute said supplies rose 5.46 million barrels last week. An Energy Department report today may show stockpiles fell 1.75 million barrels, according to a Bloomberg survey. Isaac struck the coast of southeastern Louisiana, shutting refineries and offshore platforms.
“Prices are moving lower because of the big supply gain in the API report,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “Next week’s inventory data will be messed up because of all the hurricane-related disruptions on the Gulf.”
Crude oil for October delivery declined 65 cents, or 0.7 percent, to $95.68 a barrel at 9:44 a.m. on the New York Mercantile Exchange. Prices are down 3.2 percent this year.
Gasoline for September delivery slipped 0.1 cent to $3.1251 a gallon on the Nymex. Prices surged to $3.1548 on Aug. 27, the highest close since April 30, as U.S. Gulf Coast refineries shut with the approach of Isaac and a fire in Venezuela closed the Amuay refinery, the nation’s largest.
Gasoline supplies decreased 2.4 million barrels, according to the API. They are forecast to decline 1.45 million barrels, according to the median estimate of 12 analyst estimates in the Bloomberg survey before the Energy Department report.
Companies halted 93 percent of oil production in the Gulf of Mexico and 67 percent of natural-gas output as Isaac neared the Louisiana coast, the Bureau of Safety and Environmental Enforcement said. Six Louisiana refineries were shut and three were running at reduced rates, idling 6.7 percent of U.S. capacity, according to data compiled by Bloomberg.
Isaac remained a Category 1 hurricane with top winds of 80 miles (129 kilometers) an hour as it moved northwest at 6 mph, the National Hurricane Center said at 8 a.m. local time. It was 15 miles east-southeast of Houma, Louisiana, and 40 miles southwest of New Orleans.
“While production and imports might continue to be impacted for a couple more days after the hurricane has passed, crude demand has also been impacted,” Stefan Wieler, an analyst at Goldman Sachs Group Inc. in New York, said in a note e-mailed today. “The greater concern lies in the risk to refining capacity.”
The Group of Seven said yesterday that it’s prepared to call upon the International Energy Agency, a 28-member group of oil-consuming countries, “to take appropriate action to ensure that the market is fully and timely supplied.” The IEA’s countries made available 60 million barrels of crude and oil products in June 2011 after Libyan output was disrupted by an armed uprising against Muammar Qaddafi.
Brent oil for October settlement fell 8 cents to $112.50 a barrel on the London-based ICE Futures Europe exchange
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