Oil Rises As US Refineries Restart, Irma Wanes

Oil Rises As US Refineries Restart, Irma Wanes

The market is assessing Hurricane Irma's effect on demand, even as refinery restarts in the wake of Hurricane Harvey boosted crude oil consumption expectations.

OPEC and Russian Federation have also said they would cut oil production by 1.8 million barrels per day, as a supply glut continues and Iran prepares to boost its output.

Also, the price of OPEC basket of 14 crudes, including Nigeria's Bonny Light, stood at $51.82 per barrel. Though the prospect of an extension has again grabbed headlines in the latest news reports about the discussions between Saudi Arabia, Venezuela, the UAE and Kazakhstan on the sidelines of an event in the Kazakh capital of Astana, we don't see any impact on sentiment in the oil market.

Oil prices hung onto earlier gains as government data showed US crude stocks rose sharply last week.

Ratings agencies are weighing the impact of Hurricanes Harvey and Irma, two major storms systems that hit the southern United States and Caribbean islands over consecutive weeks.

Brent crude oil futures for November delivery LCOc1 were down 66 cents at $53.12 a barrel while benchmark U.S. West Texas Intermediate crude CLc1 declined by 33 cents to $47.15. While Gulf Coast crude imports fell to the lowest in records going back to 1990 after Harvey, refineries, pipelines and offshore platforms are resuming operations.

The global surplus of crude and stocks over the five-year average fell to 190 million barrels.

Now many refineries are restarting, including the largest USA refinery. Inventories of gasoline and distillate were expected to fall 4 million barrels and 300,000 barrels, respectively. The goal of the deal, which was extended in May, was meant to drain a global oversupply that has kept prices depressed amid a resurgence in USA shale production.

Thus, the organization expects that oil production in Russian Federation in 2018 will be 60,000 barrels per day above the level of 2017.

Expectations for a hefty weekly rise in US crude-oil supplies limited the price rise for oil, however.

Analysts said the report also indicated OPEC's production-cutting deal with non-OPEC is helping to curb a supply glut.

Earlier, the Saudi Arabian Energy Minister held discussions with his Venezuelan, Kazakhstan counterparts for a possible extension of the supply cut deal beyond March next year.

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