Markets

Oil dips as US rigs, refiners appear to have avoided worst of storm

MELBOURNE: Oil prices fell in early trade on Friday as a massive hurricane raced inland past the heart of the US oil industry in Louisiana and Texas, with a storm surge weaker than predicted.

US West Texas Intermediate (WTI) crude futures fell 16 cents, or 0.4 per cent, to $ 42.85 a barrel as of 0014 GMT, adding to overnight losses.

Brent crude futures for October, set to expire on Friday, fell 9 cents, or 0.2 per cent, to $ 45.00 a barrel, while the more active November contract slipped 7 cents to $ 45.53.

Hurricane Laura hit Louisiana early Thursday with 150 mile-per-hour (240 kph) winds, damaging buildings, knocking down trees and cutting power to more than 650,000 people in Louisiana and Texas, but refineries were spared from feared massive flooding.

“Unless there is any lasting damage to oil production infrastructure, it would not be a surprise to see oil trade down a bit after the storm as damage assessment continues,” AxiCorp market strategist Stephen Innes said in a note.

US producers had shut 1.56 million barrels per day of crude output, or 83 per cent of the Gulf of Mexico’s production, while nine refineries had shut around 2.9 million bpd of capacity, or 15 per cent of US processing capacity, ahead of the storm.

Late on Thursday, the Port of Houston, the top US crude oil export hub accounting for about 600,000 barrels per day of shipments, was in the process of reopening to commercial shipping late Thursday.

The earlier closures of Houston Port, Beaumont and Port Arthur were expected to reduce seaborne crude export capacity by nearly 1 million bpd, data intelligence firm Kpler estimated, based on average figures over the past four months.

In refining, Exxon Mobil Corp was preparing to restart units at 369,024 bpd Beaumont, Texas refinery, sources familiar with plant operations said.

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