Heating oil fell as Gulf Coast refineries started up after Hurricane Isaac last week knocked out 13 percent of the region’s fuel-making capacity.
Futures sank to a one-week low on speculation that production will increase, rebuilding supplies that dropped as flooding, power losses and disruption of crude oil supplies shut seven refineries and reduced output at four others. Valero Energy Corp. said most production units are back online today at its two Louisiana refineries.
“The inventory draws were due largely to a hurricane and things are going to return to normal,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.
Heating oil for October delivery fell 2.92 cents, or 0.9 percent, to settle at $3.1176 a gallon on the New York Mercantile Exchange.
Supplies of heating oil, diesel and jet fuel probably decreased 1.55 million barrels last week, according to the median estimate of 12 analysts in a survey by Bloomberg. It would be the first decline in four weeks. The Energy Department is scheduled to report last week’s inventories at 11 a.m. tomorrow in Washington, one day later than usual because of the Sept. 3 U.S. Labor Day holiday.
Stockpiles of gasoline probably fell 3 million barrels last week, the sixth straight decline, according to the survey. Phillips 66 said today its Alliance refinery in Louisiana, one of seven plants shut because of the storm, lost power during a restart.
“Obviously, there are ongoing concerns about how fast the refineries can get back up,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago.
October-delivery gasoline declined 0.24 cent to settle at $2.9498 a gallon on the exchange.
Regular gasoline at the pump, averaged nationwide, was unchanged at $3.824 a gallon yesterday, AAA data showed. The average has climbed 49.8 cents from the year-to-date low of $3.326 on July 1.
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