Tropical storms continue to sway oil prices

Alicia Cross
September 10, 2017

U.S. West Texas Intermediate (WTI) crude futures were at $49.15 barrel at 00606 GMT, 5 cents above their last settlement.

USA crude prices dropped as a result of low refining activity following Harvey, which sharply cut demand for oil to process, traders reported.

"Oil and gas infrastructure in the U.S. Gulf Coast region continues to come back online post hurricane Harvey, with 1.0 million [barrels a day] of refining capacity still fully shut down, and 2.7 million b/d of capacity in the process of restarting", Jenna Delaney, senior oil analyst at PIRA Energy, an analytics unit of S&P Global Platts, said in an email update late Thursday.

That brought US crude inventories up to 462.4 million barrels.

As of Wednesday, about 3.8 million barrels of daily refining capacity, or 20 percent of the US total, was shut in, though a number of refineries and petroleum-handling ports were restarting.

The temporary shuttering of refineries during the storm boosted crude inventories.

All told, commercial petroleum inventories rose by 7 million barrels in the week ended September 1, the Energy Department said in its weekly report on Thursday.

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USA crude prices tumbled down more than 3 percent on Friday worries that energy demand would be hit hard as Hurricane Irma, one of the most powerful storms in a century, headed toward Florida and the Southeast.

It also reported that domestic refinery utilization dropped to 79.7% of capacity from 96.6% a week earlier. "Imports (of oil) to the U.S. Gulf Coast fell to levels not seen since the 1990s", ANZ said.

Energy prices have continued to gain support from a weak dollar with the United States currency sliding to a 31-month low on a trade-weighted basis.

USA refiner Valero's five refineries located on the Texas Gulf Coast are in the process of ramping back up, Chief Executive officer Joe Gorder said on Thursday.

Among refined products, October gasoline was down less than half a cent at $1.660 a gallon.

Distillate inventories fell this week, by 603,000 barrels, while inventories at the Cushing, Oklahoma, site increased by 669,000 barrels. "The impact of the forces of nature on USA oil production should not be overestimated - nor should their impact on demand be underestimated".

Other reports by Free-Prsite

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