Economy

Oil inventories climb 4.6 million barrels after Hurricane Harvey

Oil inventories climb 4.6 million barrels after Hurricane Harvey”

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

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). US refiners restarting after Tropical Storm Harvey, however, gains were limited by new disruptions caused by Hurricane Irma.

Brent found some support from news that Saudi Arabia will cut oil supply allocations to its customers worldwide in October by 350,000 bbl/d.

Harvey's impact was also felt in oil production.

U.S. Texas 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 U.S. oil and natural gas industry.

Crude imports fell by 822,000 barrels per day to 7.1 million barrels per day.

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.

Bloomberg news agency reported that as of September 8, only 8 percent of the oil refining capacity remained withdrawn after the Hurricane Harvey.

But the slowdown in refining and output are expected to be temporary.

"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.

Traders said it would take weeks for the United States petroleum industry to return to full capacity, and that under the current conditions it was hard to identify fundamental market trends.

Port and refinery closures along the Gulf coast and harsh sea conditions in the Caribbean have hit shipping.

Hurricane Irma, which has become one of the biggest storms ever measured - picking up the Twitter hashtag #irmageddon - early on Friday was over the Dominican Republic and Haiti, heading for Cuba and the Bahamas. It was predicted to hit Florida on Sunday or Monday.

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 miles per hour (195 km/h).



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