By The Associated Press
Oil prices rose Wednesday on concerns about
near-term oil supplies in the U.S. following a fierce storm that caused
havoc across the northeastern part of the country and was threatening to
inflict more damage inland.
By early afternoon in
Europe, those concerns helped benchmark crude for December delivery rise
65 cents to $86.33 a barrel in electronic trading on the New York
Mercantile Exchange. The contract rose 14 cents to finish at $85.68 a
barrel in New York.
In London, Brent crude,
used to price many international varieties of oil, was up 38 cents to
$109.46 per barrel on the ICE Futures exchange.
A hurricane that evolved
into a winter superstorm, Sandy cut power to more than 8 million homes,
shut down 70 percent of East Coast oil refineries and inflicted
worse-than-expected damage in the New York metropolitan area. That area
produces about 10 percent of U.S. economic output.
Sandy came ashore Monday
evening in New Jersey, dumped heavy rain inland in Pennsylvania on
Tuesday and was expected to turn toward New York state and Canada
overnight.
The storm will end up
causing about $20 billion in property damages and $10 billion to $30
billion more in lost business, according to IHS Global Insight, a
forecasting firm.
Widespread power outages
and transportation disruptions, and hazardous driving conditions would
likely reduce demand for energy. But analysts said crude imports will
likely be reduced until East Coast ports reopen.
"So even if refineries were
able to get up and running soon, there's a good chance we won't have
the feedstock to keep them going," Carl Larry of Oil Outlooks and
Opinions.
Analysts noted that it was too soon to judge the longer-term effect Sandy will have on oil prices.
"The full assessment cannot
yet be made, but at this stage it does not appear that Sandy has done
any significant damage to the supply side," said Olivier Jakob of
Petromatrix in Switzerland. "Demand in the Northeast has been severely
hit the last three days but that will quickly come back. We find it hard
to formulate a strong directional conclusion based on Sandy."
In other energy futures trading in New York:
- Wholesale gasoline rose 4.45 cents to $2.66 per gallon.
- Natural gas was up 5 cents to $3.741 per 1,000 cubic feet.
- Heating oil lost 0.33 cent to $3.0664 per gallon.
The Nymex was closed
Tuesday because of the storm, but electronic trading continued. Normal
trading is expected to resume Wednesday.
