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VOL. 36 | NO. 44 | Friday, November 02, 2012
Oil falls on storm-related supply concerns
NEW YORK (AP) — Oil fell Friday as two Northeast refineries remain shuttered. That inability to make diesel and gasoline, combined with lower demand in the storm-stricken region, has raised concerns that already ample supplies of oil will get bigger.
Major refineries owned by Phillips 66 and Hess Corp. aren't operating four days after Superstorm Sandy hit. The two have the combined capacity to refine almost 310,000 barrels of oil a day.
Philadelphia Energy Solutions says its refinery complex has been restarted with delivery delays. But the delivery of fuel throughout the New York area has been stifled by the severe damage and power outages left in the wake of the storm.
"Even if there is demand we can't get it where it needs to go," Energy analyst Phil Flynn said.
Benchmark crude fell $1.79, or 2.1 percent, to $85.30 in midday trading.
The concerns overshadowed a better-than-expected report on the labor market in October.
The Labor Department said Thursday that employers added 171,000 jobs last month, while the unemployment rate ticked up to 7.9 percent. More jobs were also added in the previous two months than was first reported.
That suggests the slow economic recovery remains on track.
Flynn said the stronger jobs numbers are also driving the value of the U.S. dollar higher, which tends to make investments like oil and other commodities less attractive.
Brent crude, which is used to price international varieties of oil, fell $1.84, or 1.7 percent, in London.
In other trading in New York:
— Wholesale gasoline futures dropped 5 cents to $2.58 per gallon.
— Heating oil fell 6 cents to $2.97 per gallon.
— Natural gas dropped 13 cents to $3.69 per 1,000 cubic feet.