DTN Oil

WASHINGTON (DTN) -- Nearby delivery month crude oil and refined product futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange slipped in early trade Wednesday, with RBOB futures falling as much as 4% as traders await landfall of Hurricane Laura along the Louisiana-Texas boarder and government data on U.S. crude and refined product supplies for the week ended Aug. 21.

Hurricane Laura is now expected reach Category 4 intensity when it makes a landfall overnight, prompting producers to shutter most of the Gulf of Mexico output and more than 1.8 million barrels per day (bpd) of refinery capacity. As of Wednesday morning, producers shut 1.6 million bpd of crude output, representing 84% of the Gulf of Mexico's offshore production, close to the 90% outage that Hurricane Katrina brought 15 years ago.

Phillips 66, ExxonMobil and Valero among others announced closure of their refineries in the region, raising some concerns over fuel supply shortages. Some 4.6 million bpd of refinery capacity is currently in Laura's pathway.

Separately, the American Petroleum Institute reported U.S. commercial crude oil supplies were again drawn down in the week ended Aug. 21 while the data also showed a drop in gasoline stockpiles and a build in distillate inventories. Crude oil stocks dropped 4.524 million barrel (bbl) while supplies at the Cushing, Oklahoma hub decreased 646,000 bbl. Gasoline stockpiles tumbled 6.392 million bbl in the week-ended Aug. 21 and distillate inventories increased 2.259 million bbl, according to API.

The U.S. Energy Information Administration will release official supply data Wednesday morning at 10:30 a.m. ET.

Near 9 a.m. ET, NYMEX West Texas Intermediate October futures slipped 16 cents to $43.20 bbl and the spot-month international benchmark Brent crude traded little changed at $45.76 bbl. ULSD September futures traded down 0.73 cents to $1.2528 gallon and the front-month RBOB September contract dropped 5.24 cents to $1.3410 gallon.

In broader markets, U.S. equity futures suggest a mixed open on Wall Street after U.S. orders for durable goods unexpectedly rose in July by more than double estimates amid a continued surge in automobile demand, indicating factories will help support the economic rebound in the coming months. U.S. consumer confidence index, however, slumped to the lowest level since 2014 at 84.7 in late August, weighed down by high unemployment levels and the expiration of the government's supplemental $600 per week in emergency unemployment benefits.

Liubov Georges can be reached at liubov.georges@dtn.com

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