(Bloomberg) — Oil edged lower — but was still headed for a fourth weekly gain — after Hurricane Laura swept through Louisiana and Texas without appearing to inflict major damage on the region’s energy infrastructure.
Futures in New York dipped below $43 a barrel after closing down 0.8% on Thursday. Laura came ashore as one of the most powerful hurricanes to ever hit Louisiana but has since weakened to a tropical storm. While it knocked out power to hundreds of thousands of people and impacted plants that produce chemicals and liquefied natural gas, southeast Texas ports and crude facilities — including the largest U.S. refinery — likely avoided the worst of it.
More than 80% of oil output in the U.S. Gulf of Mexico and almost 3 million barrels a day of refining capacity had been shut ahead of the storm, causing a spike in gasoline and oil prices earlier in the week. Crude was also buoyed this week by data showing a fifth straight weekly decline in American stockpiles.
With the passing of Laura, investor attention will now turn back to the coronavirus and the pace of the global energy demand recovery. About half of India’s trucking fleet is still idled, leading to a bleak outlook for diesel consumption there, while gasoline and diesel sales in the U.K. are still about 11% below pre-lockdown levels.
Exxon Mobil Corp (NYSE:XOM).’s Beaumont refinery in Texas will begin restarting after Laura on Friday if an assessment shows no damage, while its Baytown refinery on the Houston Ship Channel has begun the restart process. Magellan Midstream (NYSE:MMP) Partners LP’s East Houston terminal restored full operations at its refined products truck loading rack and the U.S. Coast Guard reopened the Port of Houston on Thursday.
In physical markets, Gulf Coast crudes are showing mixed signals. Mars Blend, a high-sulfur crude, dropped on Thursday to its narrowest premium against Nymex WTI futures since July, while Heavy and Light Louisiana Sweet crudes rose. Bookings for tankers to ship gasoline from Europe to the U.S., meanwhile, have surged this week.
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