Oil steadied above $70 a barrel yesterday as a powerful cyclone hit Oman and briefly disrupted exports from the Gulf energy producer.
The storm, the worst to hit Oman in 30 years, forced thousands of people from Masirah Island in the Arabian Sea and temporarily closed a terminal shipping 650,000 barrels a day of crude.
Supplies from top oil exporter Saudi Arabia, Oman’s western neighbour, were expected to escape disruption.
At 1523 GMT, London Brent crude, currently seen as the most reliable indicator of the global market, was up 8 cents at $70.48 a barrel. US light crude fell 32 cents to $65.89.
Oil surged $1.33 on Monday on news the storm was headed for the Gulf. At one stage it was equivalent to a maximum-force Category Five hurricane and the market expected disruptions to shipping and production.
"Cyclone Gonu is heading to the Gulf of Oman, forcing the evacuation of offshore rigs. Yet most supply is onshore and Saudi Arabia is not expected to be affected," BNP Paribas said in a research note.
Saudi Arabia, which lies to the west of Oman, said its offshore facilities would be unaffected by the storm. The kingdom, with oil output capacity of more than 11 million bpd, could easily offset any lost Oman supplies.
Any disruption from Oman appeared to be short-lived. A senior Omani oil official said an export terminal at Mina Al Fahal had reopened after a brief closure and refining and drilling operations were continuing as normal.
Shipping agents said it was also business as usual in the UAE.
Traders were also waiting for the latest snapshot of US inventories and demand, due in government data today, as refinery capacity is struggling to return from maintenance and glitches.