Published: Tue, September 12, 2017
Health | By Jay Jacobs

Oil mixed amidst Irma demand fears, Saudi cut extension talks

Oil mixed amidst Irma demand fears, Saudi cut extension talks

Benchmark crude futures were sideways in range-bound trading early Tuesday in Asia, as the recovery of refining capacity in Texas shut by Hurricane Harvey more than two weeks ago slowed down to a crawl and the market awaited further direction from the latest weekly United States stocks data, due out from the industry body American Petroleum Association later Tuesday, to be followed by the official figures from the Energy Information Administration Wednesday.

Irma's hit in demand will partly offset the Gulf Coast's interrupted refinery runs, which are taking longer than expected to recover, according to the bank.

Brent crude oil futures were down 13 cents, or 0.2 percent, at $53.65 a barrel at 12:17 p.m. (1617 GMT) while U.S. West Texas Intermediate crude rose by 59 cents, or over 1 percent, to $48.07.

Irma, which initially hit the Keys in Florida with winds of 130 miles per hour, knocked out power to millions of Florida customers, paralyzed tanker traffic and shut about 6,000 gasoline stations.

The firm noted it doesn't expect Irma, which made landfall Sunday in Florida, to have an impact on oil production or processing. Harvey slashed refining capacity across Texas, forcing shutdowns of key refineries from Corpus Christi and Houston to Port Arthur, including the largest USA fuel-making plant.

Falih, who has held his meetings in Astana, also met Venezuelan Oil Minister Eulogio Del Pino and both ministers "agreed on the importance of leaving all options open" including the possible extension of the oil output cuts beyond the first quarter of 2018, if needed, according to a separate statement.

"The oil market reacted to the Saudi talks", said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo.

Al-Falih and Al-Mazrouei agreed that an extension of the output cuts beyond March 31 "may be considered in due course as fundamentals unfold", according to a Saudi ministry statement. The Saudi energy minister and his Venezuelan counterpart said both their countries are exceeding full compliance with their targeted production cuts and that they shared "an optimistic outlook" on global supply and demand for crude in 2018.

Meanwhile, with 17 cents drop from its preceding week, Organization of Petroleum Exporting Countries (OPEC)'s basket price stood at $49.53 per barrel in the mentioned week.

Information for this article was contributed by Sharon Cho, Wael Mahdi and Jessica Summers of Bloomberg News.

Like this: