NYMEX crude and product futures followed a downturn in ICE Brent to settle lower Friday, as traders looked to book profits ahead of the weekend, unsure of the trajectory of Tropical Storm Isaac.
NYMEX October crude settled 12 cents lower at $96.15/barrel. September RBOB settled down 3.78 cents at $3.0780/gal and heating oil futures were down 2.29 cents at $3.1101/gal.
ICE October Brent settled $1.42 lower at $113.59/b.
"The key issue here is the choppy trade between Brent and WTI, and at the moment Brent is down on some profit-taking ahead of the weekend, and that is taking products lower," Citi Futures Perspectives analyst Tim Evans said just ahead of the Friday NYMEX settle.
Meanwhile, NYMEX crude had been propped up by a sharp turn higher in equities earlier Friday morning.
Equities, Evans noted, had perked up after US Federal Reserve chief Ben Bernanke defended the Fed's policies in an August 22 letter to California Republican Congressman Darrell Issa, and suggested the Fed was prepared to do more to help the economy.
The Fed "will provide additional accommodation as needed to promote a stronger economic recovery," Bernanke wrote, according to news reports.
But according to Evans, the profit-taking in Brent really came as investors readied themselves for the weekend with Tropical Storm Isaac moving toward the US Gulf of Mexico.
"People are ready to batten down the hatches ahead of Tropical Storm Isaac, which is picking up some strength," said Evans. "But Monday will show us more in terms of strength and track."
As of Friday afternoon, Tropical Storm Isaac made an expected turn to the northwest from its formerly westward track as it approached the Caribbean island of Hispaniola (see story, 1825 GMT).
On its current track, Isaac is expected to move up the western coast of Florida and through the far eastern Gulf of Mexico early next week.
Several oil and natural gas producers have started preparing for if the storm nears their offshore Gulf of Mexico operations. BP said that it has started to evacuate its Thunder Horse offshore platform, while Shell said it is preparing to evacuate non-essential workers from its platforms in the eastern and central Gulf of Mexico.
In a Friday note, JP Morgan analysts estimated that 1.3 million b/d of crude production could be shut-in, and a further 7.7 million b/d of Gulf Coast refining capacity could be subject to damage should the storm hit.
