NYMEX September RBOB settled 8.95 cents higher at $2.9679/gal Thursday, boosted by fears of possible refinery disruptions along the Atlantic Coast as Hurricane Irene approaches the US.
The hurricane is projected to hit North Carolina late Saturday and make its way to New York and Boston by Sunday.
As of January, there were 10 operable refineries in the Atlantic Coast region with capacity of 1.617 million b/d, according to the US Energy Information Administration.
September heating oil settled 2.48 cents higher at $2.9855/gal, and October crude settled 14 cents higher at $85.30/barrel, with lower inputs as a result of disruptions to facilities translating to more inventory. With equity markets under pressure throughout the Thursday session, NYMEX crude had difficulty rallying with products.
Equity markets were initially lifted by news that Warren Buffet invested $5 billion in Bank of America, but position-squaring ahead of Federal Reserve Chairman Ben Bernanke's speech at Jackson Hole, Wyoming, Friday ruled the day.
The consensus among economists and traders is there that will be no hint of a third quantitative easing program for the US from Bernanke.
"[M]ounting inflation pressures significantly complicate the Fed's ability to ease further, at least via balance sheet expansion," Joe LaVorgna, chief US economist at Deutsche Bank, said in a report.
"As a result, if the Fed does move toward additional accommodation, it may first try to extend the average maturity of its portfolio (akin to 'Operation Twist') rather than further increase its asset holdings; or it could expand its 'extended period' directive to apply to balance sheet levels and not just the fed funds rate," he added.
Economic data out of the US had little effect on equity or oil markets. In the week that ended August 20, the advance figure for seasonally adjusted initial claims was 417,000, an increase of 5,000 from the previous week's revised figure of 412,000. The four-week moving average was 407,500, an increase of 4,000 from the previous week's revised average of 403,500.
