Oil-markets on Friday saw Brent crude supported by
Saudi Arabia hoping to cut October supplies, while United States crude
was curbed by refinery-outages due to Hurricane-Harvey damages, which dented
demand.
Focus was shifting to three other hurricanes that are
currently tearing through the Caribbean and Gulf of Mexico.
Brent crude futures rose to 54.57 dollars a barrel at 0735
GMT, with the benchmark for international oil prices earlier marking its
highest since April at 54.79 dollars a barrel.
Saudi Arabia will cut crude oil allocations to its customers
worldwide in October by 350,000 barrels per day (bpd), an industry source
familiar with Saudi oil policy told Media on Thursday.
United States West Texas Intermediate (WTI) crude
futures were at 48.98 dollars a barrel, 11 cents below their last
settlement.
Traders said that the dip was a result of low refining
activity following Hurricane Harvey, which hit the U.S. Gulf coast two weeks
ago.
It knocked out almost a quarter of the country’s huge
refinery industry, cutting demand for crude oil refining lifeblood.
“Most refineries are restarting and we expect a near-full
recovery by month-end,” U.S. investment bank Jefferies said.
Harvey’s impact was also felt in oil production.
U.S. oil output fell by almost 8 percent, from 9.5 million
barrels per day (bpd) to 8.8 million bpd, according to the Energy Information
Administration (EIA).
Port and refinery closures along the Gulf coast and harsh
sea conditions in the Caribbean have also impacted shipping.
“Imports (of oil) to the U.S. Gulf Coast fell to levels not
seen since the 1990s,” ANZ bank said.
Traders said it would take weeks for the U.S. petroleum
industry to return to full capacity, and that under the current conditions
it was difficult to identify fundamental market trends.
As the oil industry continues to grapple with the fallout
from Harvey, a much bigger Hurricane was lashing the Caribbean islands and
heading for the United States.
Hurricane Irma, which has become one of the biggest storms
ever measured, on Friday hit the Dominican Republic and Haiti, heading for
Cuba and the Bahamas.
It was predicted to hit Florida by Saturday.
The U.S. National Hurricane Center (NHC) said that Irma was
still a Category 5 hurricane, with wind speeds of 160-185 miles per
hour (260-295 km/h).
On Irma’s heels, Hurricane Jose is heading for the Caribbean
Leeward islands, which have just been devastated by Irma, with wind speeds
of 120 mph (195 km/h).
With storm Katia about to hit the Mexican Gulf coast, there
are three major hurricanes currently active in the region.
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