Oil prices drop as Hurricane Sandy pummels U.S. east coast
Energy demand in the U.S., the world’s largest oil consumer, is also expected to fall due to the storm, resulting to lowering of production and traders leaving the market.
WTI light sweet crude for December fell to $85.70 a barrel, shedding 58 cents. In London morning trading, Brent North Sea crude to be delivered in December dropped 33 cents to $109.22 a barrel.
WTI was traded in the New York Mercantile Exchange which remained open despite other major markets were closed. Trading volume, however, was light due to flooding and evacuation in New York City.
Analysts expect the demand to stay low as the storm puts more cars off the road. As the storm forces people to stay indoors, the effect should be bearish for oil prices because of lower consumption.
Analysts also predict that oil consumption will come down as several refineries on the east coast have lowered production to prepare for the hurricane that have hit the U.S. eastern seaboard.
Hurricane Sandy left 66 casualties in the Caribbean, and prompted 10 states to declare emergencies.