Oil markets move little with industry in grip of Caribbean hurricanes

Oil markets move little with industry in grip of Caribbean hurricanes

Analysts said oil prices fell as a result of low refining activity following Harvey, which sharply reduced demand for crude oil.

Oil prices were little changed on Friday as the global petroleum industry remains in the grip of Caribbean hurricanes which have pummelled the region for the last two weeks.

The amount of oil held in US storage tanks rose by 4.6 million barrels last week after Hurricane Harvey added to the glut that has kept crude prices low for more than three years.

Brent crude is up 0.5 percent at $54.76 per barrel, after reaching its highest since April at $54.80 previous day, while U.S. West Texas Intermediate (WTI) is 0.29 percent up at $49.23 per barrel, Reuters reported.

The American Petroleum Institute (API) reported a build of 2.791 million barrels in United States crude oil inventories, compared to analyst expectations of a build of 4 million barrels for the week ending September 1.

Traders are saying that in the wake of Hurricane Harvey, the USA could see as much as 40-60 million barrels added to inventory while shuttered refineries struggle to come back online. Yet another hurricane, Katia, is developing in the Gulf of Mexico.

He noted the big drop in refinery utilization "almost assures" crude stockpiles will continue to rise in coming weeks. However, U.S. oil production also hit, with weekly output down from 9.5 million bpd to 8.8 million bpd.

As of September 6, about 3.8 million barrels of daily refining capacity, or 20 percent of the USA total, was shut in, though a number of refineries and petroleum-handling ports were restarting.

Port and refinery closures amid the Gulf coast and harsh sea conditions in the Caribbean have also affected shipping.

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

Analysts said that it can take weeks for normalisation of USA petroleum industry, which may again be affected as Irma is anticipated to hit Florida.

ANZ bank was quoted by the news agency as saying: "With another hurricane threatening to hit the U.S. coast, traders still remain cautious". Hurricane Irma hit the Dominican Republic and Haiti on Friday, heading for Cuba and the Bahamas.

Another Atlantic storm, named Jose, is following on Irma's heels and has been upgraded to hurricane strength by the U.S. National Hurricane Centre.