Brent jumps $2 per barrel

Brent crude rose to the highest level in nearly a month on Tuesday, boosted by concerns about gasoline supplies and the threat of another tropical storm. Further support for prices came after Chicago Federal Reserve Bank President Charles Evans said he favoured strong central bank accommodation for a substantial period of time, as the US economy looks to be moving "sideways."
US gasoline futures led the complex higher, up more than 2 percent, boosted by concerns about the slow return of refinery operations following Hurricane Irene. "The market is getting a little perturbed that refiners are not coming back quickly," said Stephen Schork, editor of The Schork Report in Villanova, Pennsylvania. Brent crude traded up $1.96 to $113.84 a barrel at 1:57 pm EDT (1857 GMT), after hitting $114.25, its highest since August 1. US crude, traded up $1.43 to $88.70 a barrel.
Volumes were low, with Brent trading levels down 19 percent from the 30-day average, and US crude down more than 35 percent. US RBOB gasoline futures rose more than 2 percent, while heating oil was up nearly 2 percent. RBOB also found strength ahead of the expiry on Wednesday of the RBOB September contract, the last contract of the year that covers gasoline specified for summer driving, Schork said.
Oil came under pressure in early New York trade after data showed US consumer confidence in August fell to the lowest in more than two years. The CME Group declared force majeure on the few remaining August deliveries of its New York Mercantile Exchange August 2011 heating oil futures contract Tuesday due to damage at a delivery facility in the New York Harbor caused by Irene.
Traders were concerned about the restart of Sunoco Inc's Gerard Point section of its 335,000-barrel-per-day (bpd) refinery, which was shut due to flooding at a crude charge pump, according to sources. ConocoPhillips has begun the restart of its 238,000 bpd Linden, New Jersey refinery according to environmental filings with the state. Over three million customers on the East Coast remained without power due to the storm.
The market was also cautious ahead of the strengthening Tropical Storm Katia in the Atlantic, currently about 630 miles (1,010 km) west-south-west of the southernmost Cape Verde Islands and expected to become a hurricane late on Wednesday or early on Thursday. It was unclear where it would travel, but very early models showed it missing the Hovensa refinery in St. Croix and passing north of Puerto Rico on Sunday morning.
Traders were also discussing a tropical wave over the north-western Caribbean Sea, which has a 10 percent chance of developing over the next 48 hour and could move into the western Gulf of Mexico, home to a large concentration of oil and natural gas facilities.
Traders were also eyeing reports of Israeli naval movements in the Red Sea. An Israeli military official said two additional warships had been stationed in the Red Sea but added that this was no more than routine.
He played down reports that they were connected to an Egyptian sweep of the Sinai peninsula for militants that has been reported in the Israeli media, although he declined to say what, if any, operational duties the ships were performing. Oil markets were also awaiting weekly US oil inventory data from the American Petroleum Institute, due out late Tuesday, and data from the US Energy Information Administration, to be released on Wednesday.
Analysts were forecasting a 1.2 million build in crude oil inventories for the week to August 26, as the United States releases more oil from its strategic reserve as part of co-ordinated efforts by consumer nations to make up for the loss of Libyan crude due to the civil war. Gasoline inventories were seen falling 1.4 million barrels while distillate stockpiles were expected to have risen 1.1 million barrels.