Economy

Oil rises to $55 as hurricane damages refineries

Oil rises to $55 as hurricane damages refineries”

Irma is the second major hurricane to approach the U.S.in two weeks and has already killed 14, flattening whole islands.

Harvey's impact was also felt in oil production.

"Hurricanes can have a lasting effect on refinery and industry demand", said Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt. With U.S. Gulf Coast ports and refineries out of commission, European and Asian refiners have had to increase production, elevating their demand for crude supplies.

Brent crude, meanwhile, followed WTI lower, but losses for the global benchmark were most modest, a day after prices settled at their highest level since mid-April.

Data from the U.S. Energy Information Administration Thursday showed that domestic crude supplies climbed by 4.6 million barrels for the week ended September 1.

Oil prices declined Friday, with USA crude set for its lowest finish in a week and its second session of losses in a row as domestic refineries saw a slow recovery from flooding due to Hurricane Harvey, which made landfall on the Texas coast two weeks ago.

Looking ahead, the U.S. Energy Information Administration will release its official weekly oil supplies report at 11:00AM ET (1500GMT).

But the slowdown in refining and output should be temporary.

Analysts predict that it will likely take months to return to normal operations despite efforts which were put on by U.S Gulf drillers, refineries and fuel pipelines for restarting operations.

"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 hard to identify fundamental market trends.

Hurricane Irma hit the Dominican Republic and Haiti on Friday, heading for Cuba and the Bahamas.

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

Meanwhile, investors kept an eye on the Category-5 storm Hurricane Irma, which is moving towards the Caribbean and Florida in south USA and could knock out refineries and cause fuel shortages.

Irma barreled into Caribbean islands overnight with wind speeds up to 185 miles per hour (295 kph) and was heading for Florida.



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