Oil rose above $76 on Wednesday as a tropical storm gathered strength and headed toward the Gulf of Mexico, threatening U.S. oil and gas rigs still recovering from last year's devastating hurricanes.
The storm triggered supply concerns in the world's largest energy consumer ahead of government data expected to show a fall in gasoline stocks due to strong summer driving demand.
London ICE Brent crude rose 50 cents to $76.39 a barrel by 1050 GMT. U.S. light crude rose 39 cents to $75.30 a barrel.
Brent is at a rare premium to U.S. oil because European markets are more directly affected by real and feared supply disruptions in Nigeria, Russia and the Middle East.
Tropical Storm Chris intensified over the Caribbean and could become the year's first hurricane to threaten the Gulf of Mexico later Wednesday or early Thursday, the Miami-based National Hurricane Center said. The storm's forecast path takes it into the Gulf early on Monday.
Last year's hurricanes shut in a quarter of U.S. crude and fuel output and sent oil to record highs. Around 12 percent of the U.S. Gulf of Mexico's 1.5 million barrels per day (bpd) oil output is still offline.
"It is a timely reminder of how sensitive the market is to news of hurricanes ahead of the season's typical peak period," said Eoin O'Callaghan of BNP Paribas.
The storm gave another boost to gasoline futures, already rising on expectations that U.S. stocks of the motor fuel will fall 1.6 million barrels when the government releases its latest inventory data at 1430 GMT on Wednesday.
A string of outages have left refiners struggling to keep up with strong growth in gasoline demand as U.S. motorists take to the roads for summer vacation.
"Recent refinery disruptions suggest potential for another larger-than-consensus fall in gasoline stocks," O'Callaghan said.
Crude stocks are expected to have dropped by 700,000 barrels but distillates, which include heating oil and diesel, are set to rise 700,000 barrels, according to a Reuters survey of analysts.
The storm triggered supply concerns in the world's largest energy consumer ahead of government data expected to show a fall in gasoline stocks due to strong summer driving demand.
London ICE Brent crude
Brent is at a rare premium to U.S. oil because European markets are more directly affected by real and feared supply disruptions in Nigeria, Russia and the Middle East.
Tropical Storm Chris intensified over the Caribbean and could become the year's first hurricane to threaten the Gulf of Mexico later Wednesday or early Thursday, the Miami-based National Hurricane Center said. The storm's forecast path takes it into the Gulf early on Monday.
Last year's hurricanes shut in a quarter of U.S. crude and fuel output and sent oil to record highs. Around 12 percent of the U.S. Gulf of Mexico's 1.5 million barrels per day (bpd) oil output is still offline.
"It is a timely reminder of how sensitive the market is to news of hurricanes ahead of the season's typical peak period," said Eoin O'Callaghan of BNP Paribas.
The storm gave another boost to gasoline futures, already rising on expectations that U.S. stocks of the motor fuel will fall 1.6 million barrels when the government releases its latest inventory data at 1430 GMT on Wednesday.
A string of outages have left refiners struggling to keep up with strong growth in gasoline demand as U.S. motorists take to the roads for summer vacation.
"Recent refinery disruptions suggest potential for another larger-than-consensus fall in gasoline stocks," O'Callaghan said.
Crude stocks are expected to have dropped by 700,000 barrels but distillates, which include heating oil and diesel, are set to rise 700,000 barrels, according to a Reuters survey of analysts.
Post a Comment