Oil slides as Irma heads for Florida, threatening demand

Oil slides as Irma heads for Florida, threatening demand”

It was the first weekly build in crude stockpiles for ten weeks.

As of Thursday, about 3.8 million barrels of daily refining capacity, or about 20 percent, was still shut in and it will take weeks for the US petroleum industry to return to full capacity, analysts said.

Oil prices ended higher on Wednesday to notch their fourth-winning session in a row as demand picked up after US refineries started to resume operations.

US light crude oil CLc1 dropped 0.14 cents at $48.95 barrel.

Drillers cut three oil rigs in the week to September 8, bringing the total count down to 756 energy services firm Baker Hughes energy services firm said in its Friday report. Prices gained 29 cents to $54.49 on Thursday and are 3.7% higher this week.

US crude production 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).

It also reported that domestic refinery utilization dropped to 79.7% of capacity from 96.6% a week earlier.

The U.S. lost more than 20% of its refining capacity in the days after Harvey (, though many refineries have since started to come back online.

While refineries, pipelines and offshore platforms resume operations after Harvey, another Atlantic hurricane, known as Irma, is approaching the United States coast and is set to hit Florida tomorrow.

Market focus was also being drawn to Hurricane Irma, a record Category 5 storm, which could potentially hit different parts of Florida.

Next week, the market will see monthly reports from the Organization of the Petroleum Exporting Countries and the International Energy Agency on Tuesday and Wednesday, respectively.

Meanwhile, gasoline futures shed 0.8 cents, or about 0.5%, to $1.662 a gallon, as fears of a serious supply crunch continued to fade.

Natural gas for October, headed down 6.2 cents, or 2.1%, to $2.919 per million British thermal units.

"Hurricanes can have a lasting effect on refinery and industry demand", stated Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt.

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