- NEW YORK: Brent crude rose to its highest in nearly a month as support from concerns about gasoline supplies and the threat of another tropical storm that formed far from land in the Atlantic outweighed pressure from a sharp drop in consumer confidence.
Further support for prices came after Chicago Federal Reserve Bank President Charles Evans said he favored strong central bank accommodation for a substantial period of time, as the US economy looks to be moving “sideways.”
US gasoline futures led the complex higher, up more than 2 percent, boosted by concerns about the slow return of refinery operations following Hurricane Irene.
“The market is getting a little perturbed that refiners are not coming back quickly,” said Stephen Schork, editor of The Schork Report in Villanova, Pennsylvania.
The market was also cautious ahead of the strengthening Tropical Storm Katia in the Atlantic, currently about 1,010 km west-southwest of the southernmost Cape Verde
Islands and expected to become a hurricane late on Wednesday or early on Thursday.
It was unclear where it would travel, but very early models showed it missing the Hovensa refinery in St. Croix and passing north of Puerto Rico on Sunday morning.
Brent crude traded up $2.07 to $113.95 a barrel at 12:33 a.m. (1633 GMT), after hitting $114.25, its highest since Aug. 1. US crude, traded up $1.47 to $88.74 a barrel.
US RBOB gasoline futures rose more than 2 percent, while heating oil gained 2 percent. RBOB also gained ahead of the expiry on Wednesday of the RBOB September contract, the last contract of the year that covers gasoline specified for summer driving, Schork said.
The CME Group declared force majeure on the few remaining August deliveries of its New York Mercantile Exchange August 2011 heating oil futures contract Tuesday due to damage at a delivery facility in the New York Harbor caused by Irene.
Traders were concerned about the restart of Sunoco Inc’s Gerard Point section of its 335,000-barrel-per-day (bpd) refinery, which was shut due to flooding at a crude charge pump, according to sources.
ConocoPhillips has begun the restart of its 238,000 bpd Linden, New Jersey refinery according to environmental filings with the state.
Over three million customers on the East Coast remained without power due to the storm.
Oil came under pressure in early New York trade after data showed US consumer confidence in August fell to the lowest in more than two years.
Traders were also eyeing reports of Israeli naval movements in the Red Sea. An Israeli military official said that two additional warships had been stationed in the Red Sea but added that this was no more than routine.
He played down reports that they were connected to an Egyptian sweep of the Sinai peninsula for militants that has been reported in the Israeli media, although he declined to say what, if any, operational duties the ships were performing.
Oil markets were also awaiting weekly US oil inventory data from the American Petroleum Institute, due out late Tuesday, and data from the US Energy Information
Administration, to be released on Wednesday.
Analysts are forecasting at a 1.2 million build in crude oil inventories for the week to Aug. 26, as the US releases more oil from its strategic reserve as part of coordinated efforts by consumer nations to make up for the loss of Libyan crude due to the civil war. Gasoline inventories were seen falling 1.4 million barrels while distillate stockpiles were expected to have risen 1.1 million barrels.
