13 September, 2017
Overnight, crude oil prices settled lower on Thursday, after data showed USA supplies of crude oil rose for the first time in ten weeks, as several refinery shutdowns last week due to storm Harvey lowered demand for crude. Its predecessor, Harvey, shut a quarter of USA refineries and 8 percent of US oil production, with crude prices slumping as widespread refinery outages sharply reduced demand for crude.
Saudi Arabia will cut crude oil allocations to its customers worldwide in October by 350,000barrels per day (bpd), an industry source familiar with Saudi oil policy told Media on Thursday. Brent crude LCOc1 was down 71 cents, or 1.3 percent, to $53.78 a barrel after reaching its highest level since April at $54.87.
US Gulf Coast facilities were slowly recovering from the devastating effects of Harvey, which hammered Louisiana and Texas nearly two weeks ago, shutting key infrastructure in the heart of the US oil and natural gas industry.
Focus was shifting to three other hurricanes that are now tearing through the Caribbean and Gulf of Mexico.
Analysts expect the fallout from storm Harvey will continue to weigh on crude stockpiles as refiners have been slow to restart operations while the end of the summer driving season is traditionally associated with a dip in crude oil demand.
USA oil output fell nearly 8 percent because of Harvey, from 9.5 million barrels per day (bpd) to 8.8 million bpd, according to the Energy Information Administration (EIA).
"Irma looks like it will miss the key Gulf areas, and we're more anxious about shale", said Mark Watkins, regional investment manager at U.S. Bank.
Harvey's impact was also felt in oil production.
"The impact of Hurricane Harvey is clearly visible in the report".
Traders said it would take weeks for the USA petroleum industry to return to full capacity, and that under the current conditions it was hard to identify fundamental market trends.
"Imports [of oil] to the U.S. Gulf Coast fell to levels not seen since the 1990s", ANZ bank said. It was predicted to reach Florida by September 10.
Irma barreled into Caribbean islands overnight with wind speeds up to 185 miles per hour (295 kph) and was heading for Florida. It has already killed 14 and destroyed islands in the Caribbean, with Hurricane Jose heading for the Caribbean Leeward islands, close on the heels of Irma.