Oil prices drop after massive US storm

BANGKOK - The Associated Press

Apologetic signs are posted at a station that has run out of gas in the US. AP photo

Expectations that demand for crude would likely be subdued in the aftermath of the massive storm that slammed into the U.S. East Coast earlier this week caused oil prices to sag on Nov. 2.

Benchmark crude for December delivery fell 28 cents at midday Bangkok time to $86.81 per barrel in electronic trading on the New York Mercantile Exchange.

Despite ongoing disruptions at refineries and supply terminals in the U.S. Northeast, analysts said the U.S. remained stocked with sufficient supplies and that demand for crude oil would be lower than anticipated for a few weeks.

Caroline Bain, commodities analyst for the Economist Intelligence Unit, said the storm’s impact on the oil market would likely be temporary, assuming the resumption of refinery operations. “The recent expansion in U.S. shale oil production will mean that crude oil stocks in the country will remain high for much of the year, depressing prices, and insulating the US somewhat from the supply risks that are putting pressure on crude oil prices elsewhere in the world,” she said in a market commentary.

Benchmark oil gained 85 cents to finish at $87.09 per barrel in New York on Nov. 1, with positive U.S. economic news helping to boost prices. Reports for October showed manufacturing expanded for the second straight month, private businesses added more jobs and consumer confidence was at the highest level in nearly five years.