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News Worms


Oil set for first weekly gain since July as United States refiners return

Oil set for first weekly gain since July as United States refiners return

"The data scrambles the recent trend of declining crude inventories and further rises are likely in the weeks ahead", said John Kilduff, partner at energy hedge fund Again Capital LLC in NY.

The amount of oil held in USA storage tanks rose by 4.6 million barrels last week after Hurricane Harvey added to the glut that has kept crude prices low for more than three years.

Light, sweet crude for October delivery rose 46 cents, or 0.95%, to $49.12 a barrel on the New York Mercantile Exchange.

USA crude oil prices rose and gasoline prices fell at the start of the holiday-shortened week as the gradual restart of refineries in the Gulf of Mexico that were shut by Hurricane Harvey raised demand for crude and eased fears of a serious supply crunch.

That US crude oil inventories would increase in the wake of Hurricane Harvey was largely anticipated, with some saying as much as 40-60 million barrels could be added to inventory while shuttered refineries struggle to come back online. Brent crude was down 71 cents, or 1.3 percent, to $53.78 a barrel after reaching its highest level since April at $54.87.

But as the refinery sector gradually recovers, so is its crude processing.

As of Wednesday, about 3.8 million barrels of daily refining capacity, or about 20 percent, was shut in.

Gasoline refineries were interrupted along the Texas coast, denting demand for crude oil.

In the week after Harvey hit, US crude exports dropped 749,000 barrels per day to 153,000 bpd.

Focus was shifting to three other hurricanes that are now tearing through the Caribbean and Gulf of Mexico. This production has played a major role in keeping global oil prices low.

Investors and analysts were waiting to see Hurricane Irma's impact on (http://www.marketwatch.com/story/hurricane-irma-downgraded-to-category-4-but-remains-extremely-dangerous-on-its-path-to-florida-2017-09-08) oil demand and potential disruptions to energy transportation in the Gulf Coast in the coming days.

Irma barreled into Caribbean islands overnight with wind speeds up to 185 miles per hour (295 kph) and was heading for Florida.

"Demand may continue to be distorted as multiple hurricanes make their way across the Caribbean", said Jeffrey Halley, senior market analyst at futures brokerage OANDA.

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