Oil prices rise after fierce storm causes havoc

PanARMENIAN.Net - Oil prices rose Wednesday, Oct 31, after a fierce storm caused havoc across the northeastern U.S. and was threatening to inflict more damage inland, The Asssociated Press reports.

Concerns about oil supplies pushed benchmark crude for December delivery up 78 cents to $86.46 per barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract rose 14 cents to finish at $85.68 a barrel in New York.

Brent crude, used to price many international varieties of oil, rose 46 cents to $109.54 per barrel.

A hurricane that evolved into a winter superstorm, Sandy cut power to more than 8 million homes, shut down 70 percent of East Coast oil refineries and inflicted worse-than-expected damage in the New York metropolitan area. That area produces about 10 percent of U.S. economic output.

Sandy came ashore Monday evening in New Jersey, dumped heavy rain inland in Pennsylvania on Tuesday and was expected to turn toward New York state and Canada overnight.

The storm will end up causing about $20 billion in property damages and $10 billion to $30 billion more in lost business, according to IHS Global Insight, a forecasting firm.

Widespread power outages and transportation disruptions, and hazardous driving conditions would likely reduce demand for energy. But analysts said crude imports likely will be reduced until East Coast ports reopen.

"So even if refineries were able to get up and running soon, there's a good chance we won't have the feedstock to keep them going," Carl Larry of Oil Outlooks and Opinions.