Economy

Oil weakens on fears Irma could dent US demand

Oil weakens on fears Irma could dent US demand”

Reports of a possible extension helped to decrease the pressure on oil prices amid growing concerns of a fall in energy demand due to Hurricane Irma and its aftermath.

London Brent crude for November delivery LCOc1 soared by 30 cents to touch $54.08 a barrel, while USA crude for October delivery CLc1 was trading 41 cents higher at $47.89 per barrel, reported Reuters.

Al-Falih agreed in separate talks with the ministers in the Kazakh capital Astana that steps taken by OPEC and other major crude producers such as Kazakhstan have contributed to better market stability, according to three emailed statements from the Saudi energy ministry.

Hurricane Irma had knocked out power to almost four million Florida homes and businesses on Sunday after millions were told to evacuate ahead of the storm.

It comes on the heels of Hurricane Harvey, which struck the USA oil hub of Texas two weeks ago, knocking out a quarter of the nation's refineries, many of which are now restarting operations.

Saudi Arabia and Venezuela, both members of the Organization of Petroleum Exporting Countries, agreed to consider prolonging production cuts "beyond the first quarter of 2018, if needed", the Saudi ministry said in one of the statements.

Saudi Arabian Energy Minister Khalid Al Falih discussed with his Venezuelan and Kazakh counterparts the possible extension of the global oil supply cut pact beyond March 2018, the Saudi energy ministry said late on Sunday.

Russian Federation and Saudi Arabia are leading the production pact, under which OPEC and other producers have agreed to reduce crude output by about 1.8 million barrels per day through to the end of next March.

"I think that we are going to have an average oil price of as much as $40 to $43 (per barrel) next year and we are preparing for that", Sechin said.

Venezuela Energy Minister Eulogio del Pino said on Friday that global oil inventories remain too high and urged producers to look at exemptions granted to countries such as Libya and Nigeria.

Elsewhere, Iran will reach an oil production rate of 4.5 million bpd within five years, a senior Iranian industry official had said on Sunday.

The move comes as Japan from this month raises the crude storage capacity that it lends for free to the state-run Aramco by 30 percent to 8.2 million barrels, based on a previous agreement between the two nations.

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