Oil markets fell today as US East Coast refineries cut output ahead of approaching Hurricane Sandy, which reduced crude use in the world’s largest oil consumer.
On Sunday, Phillips 66 started shutting its 238,000 barrels a day (bpd) refinery in New Jersey, the second largest plant in the United States, while three others reduced their rates.
The rate cuts coinsided with an increase of nearly six million barrels in US crude stocks in the week to 19 October.
Brent crude dropped 72 cents to $108.83 a barrel while US crude fell 71 cents to $85.51, reports Reuters.
It is anticipated that the Hurricane Sandy, which could become the largest storm ever to hit the US, will strike the East Coast on Monday night.
US Commodity Futures Trading Commission said that the speculators cut their net long US crude futures and options positions to the lowest level in three months, in the week to 23 October, as prices fell by almost six percent.
The prices were also supported by the restart of Britain’s largest oilfield and a quick recovery in Nigerian crude output.
Image: Brent crude dropped 40 cents to $109.15 a barrel. Photo courtesy of Nasa, LANCE MODIS Rapid Response.