Oil market mixed as New York reopens

Global oil prices were mixed Wednesday as trading volume picked up on the New York Mercantile Exchange after the reopening of floor trade following a two-day shutdown forced by superstorm Sandy. New York's benchmark oil futures contract, West Texas Intermediate light sweet crude for delivery in December, gained 56 cents at $86.24 a barrel. Brent North Sea crude for December lost 38 cents at $108.07 a barrel in London trading. Refineries on the US East Coast that were shut down or reduced operations before the superstorm struck Monday were resuming production, picking up demand for crude shipments. But downstream demand, which slowed sharply for the storm, was expected to remain weak for several more days, leaving little pressure on the market overall. "While we expect diesel demand to get some boost due to auxiliary power generation and recovery efforts, jet fuel demand is likely to struggle for several weeks," said JPMorgan analysts in a client note. Greg Priddy of Eurasia Group said that the market continues to be under pressure from softening demand as the world economy slows. "The most likely path forward lies toward increased headwinds for crude oil, as demand growth expectations are adjusted downward and supply forecasts increase, but with important caveats regarding potential escalations in Middle East risks," Priddy said in a new market report. "The net impact from Hurricane Sandy on overall demand, while modest, should be bearish."