Crude oil prices fell moderately in early trading in New York on Thursday. It appeared that Hurricane Laura would pass through Texas and Louisiana without lasting disruption to the region’s refineries and pipelines.
By 9:15 AM ET (1315 GMT), U.S. crude futures were down 0.3%, at $43.23 a barrel. The international benchmark Brent contract fell by 0.6%, at $45.90 a barrel.
Both had touched new five-month highs overnight. There were fears of extensive energy commodities supply shortages.
The squeeze in gasoline RBOB futures was likewise fading fast. The contract fell another 4.1% to $1.3044 a gallon, its lowest in three days.
The storm had weakened to a Category 2 hurricane from a Category 4. It was still unclear what damage it had inflicted on the region’s infrastructure.
Beyond localized flooding and power outages, none of the major refinery operators confirmed anything that hinted at prolonged outages offline. Specifically, the kind of outages that happened with Hurricane Harvey three years ago.
Consultancy TankerTrackers.com tweeted that, aside from an empty product tanker in Orange, TX, there are no major tankers docked/berthed. That’s within the Houston and Port Arthur area.
It said that this was a very well-coordinated effort to minimize impact. Question is only the inland oil storage situation and how well that is coping right now, it added.
Oil Prices: Not Much Reaction to Fed Chairman’s Speech
Refiners in Lake Charles, Beaumont, Port Arthur and Pasadena had taken a total of 2.36 million barrels a day of refining capacity offline ahead of the storm. This was according to S&P Global Platts, talking on commodities in these areas.
Meanwhile, producers offshore had shut in some 1.56 million b/d of production.
However, historically, high stockpiles across the U.S. have cushioned the kind of disruption there has been recently. Petroleum Argus also noted that it has been relatively cheap to redirect product cargoes from Europe to the East Coast. This is further easing local supply pressures.
There was little impulse to the market from another week of initial jobless claims, which have topped 1 million. The news was offset by a small upward revision to second-quarter gross domestic product figures.
It showed the U.S. economy contracting by less than what was first estimated in the three months through June.
There was not much immediate reaction to the speech from Federal Reserve Chairman Jerome Powell. He flagged a change in the central bank’s strategy that should see interest rates stay lower longer than previously thought.
In commodity news, Russian President Vladimir Putin dropped a hint that his country would continue with output restraint deals. In an interview with the state television, he said it would be better if the oil price were a little higher.
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