Oil rose as Irma weakened to a tropical storm after hitting Florida, while Gulf Coast refining continued to recover following storm Harvey.
Futures added 0.5 percent in New York after falling 3.3 percent on Friday. The intensity of Irma’s top winds have dropped to 70 miles (110 kilometers) per hour after making landfall Sunday as a Category 4 hurricane. 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.
“There will be some demand lost — obviously Florida is a big gasoline demand center,” Amrita Sen, chief oil analyst at consultants Energy Aspects Ltd., said in a television interview. “But because the damage doesn’t seem as great as initially expected, it should be fairly small.”
West Texas Intermediate for October delivery was at $47.72 a barrel on the New York Mercantile Exchange, up 24 cents, at 1:31 p.m. in London. Total volume traded was about 3 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 fell 17 cents, or 0.3 percent, to $53.61 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $5.26 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.
The storm, hurting oil demand but not production, will lead to a record build-up in crude inventories, analysts at Goldman Sachs Group Inc. said. 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. Saudi Arabia and Venezuela agreed to leave rebalancing options open, including on the possible extension of efforts to rebalance the market beyond the first quarter of 2018, the Saudi energy ministry said in emailed comments after a meeting between the countries’ energy ministers in Astana on Saturday.