Business

Oil flat as Sandy aims for US East Coast

Sunday, October 28, 2012    

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The price of oil was little changed Friday as data showed the US economy is muddling along and a big storm threatens the East Coast.

Benchmark oil fell four cents to US$86.01 per barrel in afternoon trading in New York. In London, Brent crude, which is used to price international varieties of oil, rose 56 cents to US$109.04 per barrel.

Forecasters expect a major storm to hit the US East Coast beginning early Sunday with heavy rain, winds and perhaps snow lingering into Halloween. Hurricane Sandy left 21 people dead as it moved through the Caribbean, following a path that could see it blend with a winter storm and reach the US East Coast as a super-storm. It has the potential to force refinery closures and delays in deliveries of imports.

More than half a dozen refineries could be in the path of the storm. Closures would cut into supplies of energy products such as gasoline and heating oil, which primarily is used in the Northeast to keep businesses and homes warm.

Meanwhile, the government said the US economy grew at an annual rate of two per cent in the third quarter as consumers and the government increased spending. But growth remains too weak to significantly boost job creation — or energy demand.

Demand for oil and refined products could drop if residents are forced to stay home because of bad weather, Price Futures Group oil analyst Phil Flynn said.

In addition, supplies also could be affected if ships delivering oil imports are unable to dock at the New York harbor.

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