SINGAPORE (Reuters) – Oil prices were steady at above $72 on Tuesday, with U.S. refinery shutdowns reviving supply concerns, just as the summer driving season draws to a close.
Traders said the steady prices, despite fresh signs of weakness in the U.S. housing market, are an indication the oil market is refocusing on fundamentals.
U.S. crude inched up 6 cents to $72.03 a barrel by 9:13 p.m. EDT, building on Monday’s 88-cent rise. London Brent rose 7 cents to $71.02 a barrel.
A series of U.S. refinery outages and lower oil inventory forecasts helped prop up the complex on Monday, extending a summer of high anxiety, after a slew of unscheduled turnarounds drew down stockpiles during the peak driving demand season.
Prices edged higher after traders said Citgo cut rates at its 156,000-barrel-per-day refinery in Corpus Christi, Texas, after a problem with the alkylation unit.
Markets are also awaiting news on when Chevron Corp. will restart a crude unit at its giant Pascagoula, Mississippi, refinery, one of the 10 biggest in the United States, following a fire. The company expects to cancel or reroute some crude shipments due to the shutdown.
Further support came from forecasts U.S. oil inventory data, to be released on Wednesday, would show a 1.3 million barrel draw in gasoline stocks and a 600,000 barrel draw in crude in the week to August 24, according to a Reuters poll of analysts.
Oil prices have fallen 8.5 percent since reaching a record peak of $78.77 on August 1 as speculators liquidated positions and some traders worried about the wider economic implications of a credit market squeeze.
Monday’s gains came despite a fall in U.S. stock markets after fresh U.S. economic data showing the number of unsold homes at its highest level in more than 15 years in July.
“Questions over global growth going forward to the end of the year is likely to see OPEC keep their production levels unchanged, at least at their September meeting,” said Tobin Gorey, a commodities strategist at Australia’s Commonwealth Bank.
OPEC Secretary-General Abdullah al-Badri said on Monday he felt the international oil market was well-supplied, suggesting OPEC would keep supplies at current levels when the group next meets on September 11.