DTN Oil

WASHINGTON (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange moved mixed in morning trade Friday as an overnight drop in the U.S. dollar index and higher equities countered expectations for a quick return of Gulf Coast refining and offshore production after Hurricane Laura appeared to have caused less damage in the region than previously thought.

Laura has weakened to a post-tropical depression overnight as it continues to move northward into Arkansas and the mid-Mississippi Valley. DTN Weather does not expect Laura to redevelop into a tropical system but could move off the Atlantic Coast over the weekend as an "extratropical low." While refiners and producers in the U.S. Gulf Coast continue to assess supply implications from Laura's landfall, most of the facilities appeared to have avoided any sustained damages.

Motiva Enterprises is said to be restarting its 607,000 barrels per day (bpd) refinery in Port Arthur, Texas, the largest in the U.S., and Exxon Mobil Corp is preparing to restart units at 369,024 bpd Beaumont, Texas, refinery.

Late on Thursday, the Port of Houston, the top U.S. crude oil export hub, was in the process of reopening to commercial shipping. Market sentiment is that refiners and producers in the region will restart their operations as early as next week. Chevron and British Petroleum have redeployed workers to their offshore platforms in the Gulf of Mexico.

In a report, the Department of Energy said the refinery and offshore platform shut-ins are not anticipated to cause any immediate supply issues. For the week ended Aug. 21, overall U.S. stocks of gasoline and distillate were 4.7% and 24.7% above the seasonal 5-year average, federal data showed.

As of 12:30 p.m. EDT on Thursday, 84% of the oil production and 60% of the natural gas production in the federally administered areas of the U.S. Gulf of Mexico remained shut-in, according to estimates by the Bureau of Safety and Environmental Enforcement.

In other markets, U.S. equities look to reset record highs on Friday with gains spurred by the Fed's policy shift towards higher inflation and keeping lower interest rates for longer. Fed Chair Jerome Powell said Thursday the central bank will allow inflation to run above 2% cap, at least temporarily, in order to allow for fuller and more broad-based employment. "Our revised statement reflects our appreciation for the benefits of a strong labor market, particularly for many in low- and moderate-income communities, and that a robust job market can be sustained without causing an unwelcome increase in inflation," Powell said in his statement during the virtual Jackson Hole economic symposium.

The U.S. Dollar Index, which tracks the greenback against a basket of six global currencies, slumped 0.62% in overnight trading to 92.378, heading back towards 2-year lows.

At last glance, NYMEX October West Texas Intermediate crude oil futures traded above $43 barrel (bbl) while spot-month RBOB futures gained 1.03 cents to $1.2948 gallon and front-month ULSD futures traded little changed at $1.2106 gallon. ICE October Brent crude traded just above $45 bbl before expiration later Friday afternoon, with the November contract expanding its premium to 65 cents.

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

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