Oil Steadies as Storm Headed for U.S. Seen Lifting Fuel Prices

Oil held near $68 a barrel after four days of losses, as speculation swirled over whether a giant hurricane approaching the U.S. East Coast would disrupt supplies and drive up fuel prices.

Futures in New York were little changed after slipping 3.3 percent in the past four sessions. While Hurricane Florence is likely to miss refineries in the Gulf Coast and Philadelphia areas, it could affect the Colonial Pipeline, the main conduit for moving gasoline and diesel from Houston to New York. Drivers may also fuel up before the storm, which could also potentially shut distribution terminals in the mid-Atlantic.

Tuesday’s relief for crude follows its longest losing streak since May as investors weighed a potential output increase from Saudi Arabia and Russia against the risk that U.S. sanctions on Iran’s oil exports will lead to a supply crunch. Meanwhile, President Donald Trump’s unbending stance against China on trade is raising concerns that tensions between the nations will jeopardize global economic growth and hurt energy demand.

“The industry is focusing on Hurricane Florence, and while there are no refineries in the path of the storm, the Colonial Pipeline is prepping for possible power disruptions,” said Stephen Innes, Singapore-based head of trading for Asia Pacific at Oanda Corp. “It could lead to pressure at the pump in the northeast.”

West Texas Intermediate for October delivery traded at $67.71 a barrel on the New York Mercantile Exchange, up 17 cents, at 2:45 p.m. in Singapore. The contract dropped 21 cents to $67.54 on Monday. Total volume traded was about 52 percent below the 100-day average.

Fuel Spikes

October gasoline futures added 0.5 percent to $1.9689 a gallon, after sliding 0.6 percent on Monday. Hurricane Florence, expected to hit the coast between South Carolina and Virginia by the end of this week, could spur brief but probably dramatic spikes in pump prices, according to motoring group AAA. Data provider GasBuddy expects any potential jump to be limited to the Carolinas and Virginia.

Brent for November settlement rose 39 cents to $77.76 a barrel on the ICE Futures Europe exchange. The global benchmark crude’s premium to WTI for the same month was at $10.19, increasing further after closing at the highest level in more than two months on Monday.

Some other key oil-market figures, news and events:

U.S. nationwide crude inventories may have fallen 2.25 million barrels last week, according to a Bloomberg survey of analysts ahead of government data release on Wednesday. Brent futures for November settlement remained $1.09 a barrel higher than those for February, after the spread closed at the widest since June on Monday. The pattern where near-term prices trade at a premium to later contracts, known as backwardation, typically reflects signs of supply scarcity. State-run producer Saudi Arabian Oil Co., known as Aramco, is said to supply full contractual crude volumes to at least three buyers in Asia for October. Libya’s National Oil Corp. will carry out operations as usual across the country after security forces quashed a deadly attack on the state company’s headquarters in the capital Tripoli. The nation holds Africa’s largest proven reserves of crude. Shanghai crude futures were little changed at 524.7 yuan a barrel, after closing 1.5 percent higher on Monday.