U.S. crude rises on returning refineries; gasoline slumps to pre-Harvey levels
U.S. oil prices rose on Tuesday as the gradual restart of refineries in the Gulf of Mexico that were shut by Hurricane Harvey raised demand for crude, their main feedstock.
The return of many U.S. refineries also ended a spike in gasoline prices, as initial fears of a serious supply crunch faded.
U.S. West Texas Intermediate (WTI) crude futures were at $47.55 barrel at 0656 GMT, up 26 cents, or 0.55 percent, from their last settlement.
Gasoline futures, by contrast, fell 4 percent from their last close, to $1.68 per gallon, down from $2.17 a gallon on Aug. 31 and back to levels last seen before Hurricane Harvey hit the U.S. Gulf coast and its large refining industry.
"Gasoline fell as refineries in Texas began to reopen," said William O`Loughlin, investment analyst at Rivkin Securities.
Texas on Monday edged towards recovery from the devastation of Hurricane Harvey as shipping channels, oil pipelines and refineries restarted some operations.
The Department of Energy said that eight U.S. oil refineries with a total of 2.1 million bpd, or 11.4 percent of total U.S. refining capacity, were still shut as of Monday afternoon.
Harvey hit the Texan coast late on Aug. 25 and at its peak knocked out almost a quarter of the entire U.S. refining capacity.
In international markets, Brent crude futures dipped 3 cents to $52.31 a barrel as traders were cautious on oil - seen as a riskier asset - and instead preferred gold, an investor safe-haven, following North Korea`s most powerful nuclear test to date.