Oil prices rise amid sharp decline in United States output

Sunday, 10 Sep, 2017

U.S. West Texas Intermediate and international-benchmark Brent crude oil finished higher for the week, but Brent was the best performer.

Igor Sechin, the head of Russian oil company Rosneft, said the decline in the value of the US dollar was skewing the market. About 6 percent of the total USA refining capacity is still down and oil is filling up in storage facilities as a result.

"With another hurricane threatening to hit the United States coast, traders still remain cautious".

"The impact of Hurricane Harvey is clearly visible in the report".

Light, sweet crude for October delivery rose 46 cents, or 0.95%, to $49.12 a barrel on the New York Mercantile Exchange.

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Despite this week's crude oil inventory build, over the last ten weeks, according to the API, crude oil inventories in the United States have shed nearly 50 million barrels.

USA crude fell as a result of low refining activity following Harvey, which sharply reduced demand for crude oil, refining's lifeblood, traders said. 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.

At the same time, prices were weighed down by fears that Hurricane Irma in the Caribbean could interrupt crude shipments in and out of the United States.

Weekly crude oil inventory draws have still failed to climb with any significant meaning-a fact which has not deterred oil production in the U.S., which is climbing at a slow and steady pace, reaching 9.530 million bpd for the week ending August 25-about 380,000 bpd off from the most recent 2018 daily average proposed by the EIA's Short Term Energy Outlook of 9.91 million barrels. Fuel shortages were reported in Florida as retailers struggled to keep up with demand from customers, many of whom were evacuating and filling tanks ahead of the storm's landfall expected this weekend.

The US National Hurricane Centre (NHC) said that Irma was still a Category 5 hurricane, with wind speeds of 160-185 miles per hours (260-295 km/h). Hurricane Jose is following a similar path, and Hurricane Katia is in the Gulf of Mexico headed towards Mexico. It is likely to have an impact on gasoline demand.