Submitted by Fox First at Ten on October 31st
By PABLO GORONDIAssociated 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.
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Pamela Sampson in Bangkok contributed to this report.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
