Published: Tue, September 12, 2017
Worldwide | By Gretchen Simon

Saudi to supply full crude allocations to most Asian refiners

Saudi to supply full crude allocations to most Asian refiners

Oil prices steadied last Friday after nearly a week of sharp increases as Hurricane Irma drove towards Florida after tearing through the Caribbean. He noted that the impact of Harvey on US crude demand was "not as weak as initially anticipated", which was providing a slight boost to WTI.

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.

"If the Harvey impact was potentially and possibly short-term bullish for oil prices the same can not be said about Irma", PVM analyst Tamas Varga said in a note.

It comes on the heels of Hurricane Harvey, which struck the USA oil hub of Texas two weeks ago, knocking out a quarter of the nation's refineries, many of which are now restarting operations.

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.

Harvey's negative impact on demand will remain larger, however, given the large concentration of energy-intensive petrochemical activity in its path. Still, on a net basis, US crude inventory builds could grow to record levels with smaller production draws in the coming week, Goldman Sachs said.

US Crude Futures Drop as Hurricane Irma Approaches Florida
Irma has knocked out power to 4.5 million customers, paralyzed tanker traffic and shut about 6,000 gasoline stations. Irma, however, was not expected to affect supply as it was headed away from US oil production in the Gulf.

Among refined products, October gasoline lost 1.3 cents, or 0.8%, to $1.635 a gallon, while October heating oil settled at $1.743 a gallon, down 2.3 cents, or 1.3%.

Despite the agreement, the oil price (WTI) has suffered a major selloff on the day of the agreement extension and was down around 3 percent by the end of the day.

Meanwhile, Saudi Arabia-the world's largest exporter of crude oil-said Sunday that the country's energy minister and his Venezuelan counterpart had discussed the possibility of extending OPEC's oil output cut deal beyond the March 2018 expiration date. Analysts at consultancy JBC Energy said those talks should prove supportive for crude prices.

Opec and other producers including Russian Federation pledged to reduce output by about 1.8 million barrels a day through March to trim global oil inventories and buttress prices.

The week will also see key monthly reports from the Organization of Petroleum Exporting Counties and the International Energy Agency to assess global oil supply and demand levels.

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