Crude rose the most in a month on forecasts that U.S. gasoline supplies dropped after Hurricane Sandy forced the shutdown of East Coast refineries and as Americans went to the polls to pick a president.
Futures climbed to a two-week high after a Bloomberg survey showed supplies of the motor fuel probably decreased 1.5 million barrels last week. Hess Corp. and Phillips 66’s New Jersey refineries remained shut after Sandy. U.S. voters decide today whether to return Barack Obama, a Democrat, as president or elect his challenger, Mitt Romney, a Republican.
“Clearly there is a short-term shortage of gasoline on the East Coast because of the closure of refineries, terminals and pipelines,” said Julius Walker, global energy markets strategist at UBS Securities LLC in New York. “These problems should be short-lived. In the oil market, you also have some sentiment about the election affecting trading.”
Crude oil for December delivery advanced $3.06, or 3.6 percent, to $88.71 a barrel on the New York Mercantile Exchange, the biggest gain since Oct. 4 and the highest settlement since Oct. 22. Prices are still down 10 percent this year.
Brent oil for December settlement increased $3.15, or 2.9 percent, to $110.88 a barrel at 2:34 p.m. New York time on the ICE Futures Europe exchange.
Gasoline supply may have dropped to 198 million barrels in the seven days ended Nov. 2, according to the survey. That would be the first decline in four weeks.
The Energy Department is scheduled to release its inventory report at 10:30 a.m. tomorrow in Washington.
Stockpiles of gasoline fell to 195.4 million barrels in the week ended Oct. 5, the lowest level since October 2008, according to Energy Department data. Inventories were at 199.5 million in the week ended Oct. 26.
“There is fear that until things are back to normal we might have some tight supply and the market is keeping an eye on it,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “There is still some uncertainty about the result of the election. People are waiting to see who is going to win.”
Crude inventories probably rose 2 million barrels to 375.1 million barrels last week, according to the Bloomberg survey.
Gasoline futures for December delivery advanced 7.87 cents, or 3 percent, to $2.6989 a gallon on the Nymex.
Phillips plans to resume normal operations at the 238,000- barrel-a-day Bayway plant in two to three weeks after repairing equipment damaged by Sandy, the Houston-based company said yesterday in a statement on its website.