U.S. oil prices rose on Tuesday and gasoline fell as the gradual restart of refineries in the Gulf of Mexico that were shut by Hurricane Harvey raised demand for crude and eased fears of a fuel supply crunch.
Gasoline futures RBc1 dropped by four percent from their last close, to $1.68 per gallon, down from $2.17 on Aug. 31 and back to levels last seen before Harvey hit the U.S. Gulf Coast and its large refining industry.
U.S. West Texas Intermediate crude futures Clc1 rose more than 1 percent to $47.84 per barrel by 1008 GMT, up 55 cents from their last settlement.
“Gasoline fell as refineries in Texas began to reopen,” said William O‘Loughlin, investment analyst at Rivkin Securities.
Texas was edging toward recovery from the devastation of Harvey as shipping channels, oil pipelines and refineries restarted some operations.
Eight U.S. oil refineries with 2.1 million barrels per day of refining capacity, or 11.4 percent of the U.S. total, were shut as of Monday afternoon, the Department of Energy said.
Harvey hit the Texan coast late on Aug. 25 and at its peak knocked out almost a quarter of all U.S. refining capacity.
In international markets, Brent crude futures LCOc1 edged higher by 0.3 percent to $52.49 a barrel amid signals the Organisation of the Petroleum Exporting Countries could extend its output limits beyond the first quarter of 2018.
Russia and Saudi Arabia have discussed extending an oil output cut agreed among OPEC and non-OPEC producers but no specific decisions have been made yet, Russian Energy Minister Alexander Novak was quoted as saying on Tuesday.
Iranian Oil Minister Bijan Zangeneh said unofficial talks were under way to extend the cuts, adding that global crude inventories remained at high levels. Source: Reuters