Oil Rises As US Refineries Restart, Irma Wanes

13 September, 2017, 00:40 | Author: Dustin Murphy
  • Oil edges up as Saudi discusses oil supply cut extension

Oil prices edged up on Monday after the Saudi oil minister discussed possibly extending a pact to cut global oil supplies beyond March 2018 with his Venezuelan and Kazakh counterparts.

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.

"Irma will have a negative impact on oil demand but not on oil production or processing", Goldman analysts said in a note, Oil Price reported.

USA crude for October delivery was up 41 cents, or 0.9 percent, at $47.89 a barrel by 0648 GMT, having tumbled 3.3 percent on Friday.

Oil prices still gain some degree of support from expectations of firm global demand and the potential for OPEC output cuts to be extended.

Brent crude LCOc1 settled up 43 cents or 0.8 percent to $54.27 per barrel.

Hurricane Irma knocked out power to over 7.3 million in Florida, Georgia, South Carolina and Alabama, according to state officials and utilities on Monday. Production had been on the rise over the summer, raising concerns OPEC's deal to cut output wasn't working. Mark Zandi, the chief economist at Moody's Analytics, said the US economy could suffer lost revenue from the storms and the estimate for third-quarter gross domestic product could drop a half point to 2.5 percent as a result.


The deal aims to curb a glut that has weighed on crude prices for more than three years.

US inventories data will be closely watched over the next two days amid uncertainties over the impact of recent hurricanes.

US crude stockpiles likely rose by 4.82 million barrels last week, according to a Bloomberg survey ahead of Energy Information Administration data released Wednesday.

"The market is looking for a significant build in oil inventories", said Ric Spooner, chief market analyst at CMC Markets in Sydney.

The latest inventories data will come back into focus with the API data due for release after Tuesday's NY close with the latest EIA data on Wednesday.

Four of the world's top oil producers agreed to keep all options "on the table" in order to ensure stability in the oil market, including the possibility of prolonging the output cuts that were already in force, beyond their expected end-date of March 2018. "A similar production level is also anticipated for September", the Saudi ministry said.

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