Oil gains as US refineries reopen
Oil trimmed the biggest monthly decline since May and gasoline rose as refineries started resuming operations after the Atlantic superstorm Sandy moved away from the US east coast.
Crude futures gained as much as 0.4 per cent after advancing 0.2 per cent yesterday. Philadelphia Energy Solutions' 355,000 barrel-a-day Pennsylvania refinery is restoring operations and NuStar Energy LP's 74,000 barrel-a-day Paulsboro, New Jersey, plant will be at full production tomorrow, the companies said.
Seven refineries with a total capacity of 1.29 million barrels a day had shut or reduced operations because of Sandy.
Fuel supply in the storm-hit region is expected to bounce back quickly as most refineries emerged unscathed, but demand was likely to take a much bigger knock as roads and airports remained shut.
Futures are down 6.7 per cent in October and 13 per cent this year.
Brent oil for December settlement rose 7 cents to $109.15 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude's premium to the West Texas Intermediate contract was at $23.18, down from $23.40 yesterday.
Investors will continue to keep a close watch for any damage to oil infrastructure and on fuel demand after the storm.
"It is still too early to tell whether there has been any significant damage to the network of oil terminals, pipelines, and trucking facilities in the region, but if logistics are damaged, oil prices will likely remain under selling pressure," ANZ analysts said in a note.