By Ann Koh and Alex Longley
Prices also got a boost after the American Petroleum Institute reported U.S. oil inventories fell by 4.52 million barrels last week and gasoline stockpiles shrunk by 6.39 million barrels, according to people familiar with the data. That would be the fifth straight weekly decline in crude supplies if the industry estimates are confirmed by official data due Wednesday.
Laura has the potential to take some big refineries offline and disrupt global energy flows. On its current track, the storm could lead to around 10% to 12% of U.S. refining capacity being shut for more than six months, according to a disaster modeler with Enki Research. Tanker rates to ship gasoline from Europe to the U.S. are already surging even before Laura makes landfall.
“Oil traders will be pre-occupied with the developments of the hurricane today,” said Tamas Varga, an analyst at brokerage PVM Oil Associates Ltd. “The most dangerous hurricane of the past 15 years is approaching the major U.S. oil producing and refining center.”
The hurricane will likely only have a short-term impact on global prices, however, with this year’s lackluster summer driving season nearing an end and a pickup in consumption remaining uncertain due to the pandemic. Gasoline demand in key consuming nations appears stuck at about 10% to 15% below year-earlier levels, while jet fuel usage is much further behind.
Brent’s front-month futures contract was trading at a discount of 39 cents to the second month. This contango structure has narrowed sharply since the storm first appeared, as the shut-down of some U.S. crude output makes supplies from outside of North America more valuable.
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