Hurricane Sandy dampens oil demand
Brent crude slipped to near $109 a barrel this morning as Sandy, one of the biggest storms ever to hit the United States, shut East Coast refineries, roads and airports, reducing crude and fuel demand in the world's largest oil consumer.
Fuel supply into the region ground almost to a halt as the storm forced the closure of two-thirds of the region's refineries, its biggest pipeline, and most major ports.
Brent crude for December slipped for a second session, to stand down 40 cents at $109.04 a barrel by 06.52 GMT.
US crude for December edged down 17 cents to $85.37.
US gasoline futures fell 0.73 percent to $2.7368 a gallon, after climbing more than 5 cents yesterday on expectations of tighter supply.
Global markets were subdued on the closure of New York stock exchanges, with Asian shares making modest gains.
Sandy battered the US East Coast, prompting the closure of air, ship, rail and even highway services, and knocked out power to more than 2.8 million homes and businesses in the region.
"People can't go out, they can't use, they can't consume," said Jonathan Barratt, chief executive of Barratt's Bulletin, a Sydney-based commodity research firm.
"Crude inventories are running pretty high, 11-12 per cent above a 5-year average." "The only area of concern is if the refineries are going to be knocked out for a period of time," Mr Barratt said, but added this would be a rare event as operators were prepared for the storm.
Sandy will close US stock markets for a second day today, as Wall Street turned its attention to whether markets would be able to resume functioning for the month's final trading day tomorrow.
The American Petroleum Institute said yesterday it had not yet delayed the release of its weekly petroleum stocks report, but would continue to assess conditions.