In this photo taken July 2, 2012, early morning sunlight illuminates fuel storage tanks at a North Little Rock, Arkansas, petroleum distributorship. The price of oil fell in Asia Tuesday, Aug. 28, 2012, as crude demand suffered from refinery shutdowns on the US Gulf coast due to the onset of Tropical Storm Isaac. AP PHOTO/DANNY JOHNSTON
SINGAPORE—Oil fell in Asia Tuesday as crude demand suffered from refinery shutdowns on the US Gulf coast due to the onset of Tropical Storm Isaac while talk of a release of oil reserves surfaced, analysts said.
New York’s main contract, light sweet crude for delivery in October, was down one cent to $95.46 a barrel in volatile trade, and Brent North Sea crude for October delivery shed three cents to $112.23 in the afternoon.
Crude prices were facing downward pressure “as Tropical Storm Isaac shuttered refineries on the US Gulf coast, cutting demand for crude,” Phillip Futures said in a report.
“Traders were also eyeing the possibility of Western governments releasing strategic oil reserves to moderate prices, with some analysts suggesting the storm could provide the trigger,” it added.
Six of 12 refineries in the path of Isaac had shut down or were shutting down operations, affecting roughly 17 percent of total Gulf coast refining capacity, the US Department of Energy said late Monday.
About 78 percent of crude oil production and about 48 percent of natural gas production in the heart of the US refining and offshore energy industry had been shut in by 1900 GMT, it added.
Meanwhile, a hurricane warning was issued for New Orleans and nearby areas as forecasters said the storm was likely to reach hurricane force late Monday or early Tuesday before making landfall.
The National Hurricane Center said in its 0000 GMT bulletin that Isaac was about 295 miles (470 kilometers) south-southeast of Mobile, Alabama and packing maximum sustained winds of 70 miles per hour.