Oil prices rose on Wednesday as strong global refining margins and the reopening of U.S. Gulf Coast refineries provided a more bullish outlook after sharp drops due to Storm Harvey.
Brent LCOc1 had gained 28 cents to $53.66 a barrel. U.S. West Texas Intermediate (WTI) crude futures Clc1 were up 15 cents at $48.81.
Olivier Jakob of Petromatrix consultancy said “Hurricane Harvey was bearish for crude and speculators went massively short WTI but now there is a reversal to positions pre-Harvey. Strong margins are helping underpin crude … gasoil is at its highest point this year,”.
Many refineries, pipelines and ports that were knocked out by Harvey 10 days ago are restarting. As of Tuesday, about 3.8 million barrels per day (bpd) of refining capacity, or 20 percent of the U.S. total, was shut. This compares with 4.2 million bpd at the height of the storm.
Focus was also being drawn to the Category 5 storm Hurricane Irma, which is barreling toward the Caribbean and Florida and could knock out other refineries and cause more fuel shortages.
Around 250,000 barrels of daily refining capacity in the Dominican Republic and Cuba lies in the immediate path of Irma, Thomson Reuters Eikon data showed.
Fuel storage data due on Wednesday from the American Petroleum Institute and on Thursday from the Energy Information Administration is expected to give a better view of the extent of Harvey’s impact on U.S. fuel inventories, although analysts say it will take a few weeks longer to get a complete picture.