(Bloomberg) -- Oil advanced as the market shrugged off Hurricane Irma’s effect on demand, with the Texas Gulf Coast repairing itself after Harvey.
Crude jumped 1.2 percent in New York. Gulf Coast refiners hit by Harvey have managed to get most plants back on their feet in a region that processes about half the nation’s crude. Gasoline futures, meanwhile, declined amid concerns that demand would weaken as Irma, now a tropical storm, continues to roll north through Florida.
“From a technical basis, support held at $47. That continues to be a critical level,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, in a telephone interview. “At this point, there is an expected hit to gasoline demand from Hurricane Irma in Florida, but we are hearing that the infrastructure isn’t as bad off as feared.”
Recovery from Harvey remains a bigger concern for the oil market than Irma, according to Goldman Sachs Group Inc. Fuel producers in Texas are still working to restore normal operation at some plants, including the nation’s largest refinery operated by Motiva Enterprises LLC. But others such as Citgo Petroleum Corp., Marathon Petroleum Corp. and Flint Hills Resources LLC have resumed crude processing.
The price move higher also “reflects a little more confidence that the refiners are recovering,” James Williams, president of London, Arkansas-based energy researcher WTRG Economics, said by telephone. Still, the oil market may continue to chop around as there is some lingering uncertainty as to how much crude is actually being processed by these refiners, he said.
West Texas Intermediate for October delivery rose 59 cents to settle at $48.07 barrel on the New York Mercantile Exchange. Total volume traded was about 5 percent above the 100-day average.
Brent for November settlement rose 6 cents to end the session at $53.84 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $5.22 to November WTI.
Gasoline futures dropped 0.8 percent to settle at $1.6345 a gallon, the lowest level in more than two weeks.
Irma has knocked out power to at least 6.7 million customers, paralyzed tanker traffic and shut gasoline stations. As the storm heads up Florida’s west coast, it also threatened more than $1 billion worth of crops.
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