Oil Prices Hold Gains as Stockpile Numbers Hike

Oil Prices Hold Gains as Stockpile Numbers Hike

Oil Prices Hold Gains as Stockpile Numbers Hike

Harvey is still likely to be a bigger driver for the crude market, analysts at Goldman Sachs said.

The lack of an outlet for United States crude production should post-Harvey refinery outages remain elevated could in addition over time create risk of onshore production disruptions.

Experts also say, however, US stockpiles data may not give a full picture in coming weeks because of Hurricanes Harvey and Irma.

The oil demand by Gulf Coast refineries has declined in the wake of Harvey, as many operations had to curtail or shut-down production temporarily.

The refinery shutdowns curtailed production of refined products, but it was not the only factor contributing to higher pump prices in that week.

Brent crude rose 53 cents or 0.9 percent to $54.37 per barrel by 11:56 a.m.(1556 GMT). "We expect crude prices to be stuck in somewhat of a holding pattern until we have Gulf Coast refineries brought back to full capacity".

Oil prices nudged higher on Wednesday, supported by signs that the global oil market is tightening with supplies falling and demand growth remaining strong. India will grow by 7.5 percent next year, Brazil and Russian Federation will rebound and grow at 1.5 percent in 2018 and China will grow at 6.3 percent next year.

US Hurricanes Affecting Oil Prices, Saudi Could Cut Output

Saudi Arabia and Venezuela, both members of Opec, agreed to consider prolonging production cuts "beyond the first quarter of 2018, if needed", the Saudi ministry said. In August, the IEA has anticipated annual growth would hit 1.5 mb/d, again an increase on July's 1.4 mb/d forecast.

Reports also suggest that Saudi will cut allocations by 0.35 mbpd in October.

Investors were also monitoring closely for the storms' impact on inventories. Still, that's about in line with the group's production last month, meaning OPEC won't be able to reverse its current output curbs if it wants to keep world markets balanced next year. Compliance to output cuts improved from 84% in July to 89%. Data from industry group the American Petroleum Institute (API) was due later on Tuesday while the U.S. Department of Energy's Energy Information Administration (EIA) will release its numbers on Wednesday (9/13).

Crude inventories rose 5.9 million barrels, compared with analysts' expectations for an increase of 3.2 million barrels.

USA oil inventories are back within the five-year range and are at their lowest since January 2016. "Due to the demand-focused impact of Irma, we find that, by the end of September, gasoline and distillate stocks respectively are only -8 million barrels and -13 million barrels lower respectively than they otherwise would have been".

Markets were upended in late August when Hurricane Harvey struck the southern coast of Texas, sidelined a good portion of total USA refining capacity and threatened production centers in the Gulf of Mexico and inland shale basins.

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