Crude Oil Prices Hit 1-Month Highs, Demand Hopes Supportive

Crude Oil Prices Hit 1-Month Highs, Demand Hopes Supportive

Hurricanes Harvey and Irma are projected to slow USA oil demand growth in the third quarter, but in disruption is causing shortages which are expected to be short-term only. Demand is expected to slip due to the effects of Hurricane Irma on high-consuming states of Florida and Georgia.

Much of that was because of a near 10 million-barrel increase in stocks in the US Gulf region and as crude production rebounded from a brief Harvey interruption.

Zanganeh said compliance by members of the Organization of the Petroleum Exporting Countries with an agreement to curb oil output had been about 98 percent in the past eight months and would improve in the future.

Harvey, which first trampled communities in South Texas at landfall August 25 and then flooded the Greater Houston area as it stalled on the Gulf Coast, caused substantial electricity outages, as power plants and transmission infrastructure were affected by high winds and significant flooding, the Energy Information Administration (EIA) noted Wednesday.

It recommended that the USA strengthens its energy security to address events, such as hurricanes, by potentially adding products to government-held inventories.

At the Multi Commodity Exchange, crude palm oil for delivery in September month traded higher by Rs 2.90, or 0.53 per cent to Rs 550 per 10 kg in business turnover of 232 lots.

The American Petroleum Institute said that crude stockpiles in the United States increased by 6.2 million barrels in the week ending 8 September to 468.8 million, almost double from the analysts' expectations.

US gasoline stocks USOILG=ECI slumped 8.4 million barrels, the largest weekly decline since data began in 1990. USA distillate stocks fell by 3.2 million barrels.

Florida, which was hammered by Irma, is the No. 3 consumer of gasoline among US states, according to Energy Department figures; neighboring Georgia ranks seventh.

In its monthly oil market report the OPEC's research arm said better-than-expected numbers from industrialised nations in the West and China has led it to raise its oil demand growth estimate for 2017 to 1.42 million barrels a day (b/).

According to PVM's Tamas Varga "If the Harvey impact was potentially and possibly short-term bullish for oil prices the same can not be said about Irma", and that "There is no refinery capacity in the region, therefore, the main concern lies in the hit of oil demand".

For some petrostates, like Libya and Nigeria, this was a matter of course as they work to recover from significant supply disruptions, but for others like Ecuador it was about open defiance of a painful plan to pursue when crude is barely fetching $50 per barrel.