U.S. Crude Prices Fall as Another Storm Approaches
By Christopher Alessi
LONDON -- Oil prices were mixed Friday as investors waited to see the potential impact of Tropical Storm Nate on U.S. Gulf Coast oil infrastructure.
On the New York Mercantile Exchange, West Texas Intermediate futures fell 0.35% to $50.61 a barrel. Brent crude, the global benchmark, was up slightly, by 0.11%, at $57.06 a barrel in London midmorning trading on the InterContinental Exchange.
"As we come into the weekend, the market is focusing on the implications of Tropical Storm Nate and how big any disruptions will be" on crude production and refining capacity, said Richard Mallinson, an analyst at consultancy Energy Aspects.
As with Hurricane Harvey in August, the "tendency is for the focus to be more on refinery shutdowns, which is probably more positive for product prices and probably a little bearish for crude prices," Mr. Mallinson said.
The storm, which formed in Central America, is forecast to strengthen into a hurricane and potentially threaten the Gulf this weekend, according to the National Hurricane Center.
Meanwhile, oil prices posted gains Thursday for the first time in three days on the back of a meeting between Saudi King Salman and Russian President Vladimir Putin in Moscow.
The two leaders discussed extending Russia's participation in a coalition led by the Organization of the Petroleum Exporting Countries that has withheld almost 2% of global oil supply from the market in 2017, though no new agreement was struck.
"The landmark meeting in Moscow breathed new life into oil bulls" and "buoyed expectations that the two protagonists of a supply pact to curb production will push ahead with an extension through the end of 2018," said Stephen Brennock, an analyst at brokerage PVM Oil Associates Ltd.
The original deal, struck nearly a year ago between OPEC and 10 other non-OPEC countries, was to cut production by 1.8 million barrels a day for six months. The agreement was extended in May of this year to continue through the first quarter of 2018.
At the same time, there are "a couple of potentially game-changing developments on the horizon for the coming days in geopolitics," according to analysts at consultancy JBC Energy.
Oil investors are closely watching the fallout over an independence referendum in Iraq's semi-autonomous Kurdistan region that could result in the blocking of roughly 500,000 barrels a day in crude sales.
The market is also waiting on President Donald Trump's expected decision next week on whether or not to certify Iran's compliance with the international nuclear deal. Iran is an OPEC member and key Middle Eastern oil producer.
Investors and analysts will be looking ahead next week to monthly market reports from the International Energy Agency and OPEC.
Among refined products, Nymex reformulated gasoline blendstock--the benchmark gasoline contract -- was up 0.64% at $1.62 a gallon. ICE gasoil, a benchmark for diesel, changed hands at $532.00 a metric ton, down 0.65% from the previous settlement.
Write to Christopher Alessi at email@example.com
(END) Dow Jones Newswires
October 06, 2017 06:18 ET (10:18 GMT)Copyright (c) 2017 Dow Jones & Company, Inc.