New York heating oil futures also gained more than 1 percent, touching the highest level relative to U.S. crude oil on record as dealers hedged against the risk of power outages and flooding that could damage refineries for weeks to come. The crack spread, the difference between wholesale petroleum product prices and crude oil prices, touched $45.15 a barrel.
“Markets will be watching for reports of damage to energy infrastructure, notably refineries, post-Sandy given the state of extremely low gasoil inventories as we move into winter season,” Deutsche Bank analysts said.
Front-month RBOB gasoline futures rose as high as $2.8115 a gallon, the highest price since October 17, in early trading, but later pared gains as dealers reckoned that the almost total shut-down of eastern seaboard roads and airports would reduced fuel demand, offsetting the refinery outages.
By 11:28 a.m. EST, gasoline futures were up 4.34 cents or 1.6 percent at $2.7425 a gallon.
“When life stands still, the effect should be bearish for oil prices as consumers consume less oil when they are forced to stay indoors,” said oil analyst Tamas Varga at brokerage PVM Oil Associates in London.
U.S. crude futures dipped in choppy trading as ample domestic crude supply and curbed use by shut refineries hemmed prices in.
Fifty million people from the U.S. Mid-Atlantic to Canada were in the path of Hurricane Sandy. Forecasting services expected the storm to strike the New Jersey shore near Atlantic City on Monday night. Brent December crude rose 26 cents to $109.81 a barrel, having reached $110.26. Brent on Monday was on pace to post about a 2 percent loss for the month, a second straight monthly loss.
U.S. December crude was down 34 cents at $85.94 a barrel, having swung from $85.34 to $86.43. U.S. crude futures were on track to end October down more than 6 percent, after sliding more than 4 percent in September.
