Oil steady as U.S. refining demand rises but ample crude supplies weigh

BP says it started up its Thunder Horse South Expansion Projection in the Gulf ahead of schedule and under budget

Oil steady as U.S. refining demand rises but ample crude supplies weigh

The price for October futures of West Texas Intermediate (WTI) grew by 0.06 percent and stood at $49.12 per barrel.

Brent crude futures were up 8 cents at $54.57 a barrel at 7:30AM GMT, with the benchmark for global oil prices earlier marking its highest since April at $54.79 a barrel.

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

Hurricane Harvey barreled into the U.S. Gulf of Mexico coast around 10 days ago, closing almost a quarter of the nation's refining capacity, although some of that is now coming back online.

The API reported a build of 2.791 million barrels in USA crude inventories. As of Wednesday, 20% of total USA refining capacity still remained offline, roughly 3.8 million barrels, according a Reuters report, but some refineries in the Gulf Coast we were restarting.

Weekly crude oil inventory draws have still failed to climb with any significant meaning-a fact which has not deterred oil production in the United States, 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.

The National Hurricane Center has raised the odds that the Category 5 storm will hit the USA, fueling fears about yet more disruption to US oil production.

But as the refinery sector gradually recovers, so is its crude processing.

Bloomberg news agency reported that as of September 8, only 8 percent of the oil refining capacity remained withdrawn after the Hurricane Harvey. Yet another hurricane, Katia, is developing in the Gulf of Mexico. The Energy Information Administration on Thursday reported (http://www.marketwatch.com/story/oil-gains-ahead-of-expected-drop-in-gasoline-stockpiles-2017-09-07) that US crude inventories rose 4.6 million barrels for the week ended September 1.

"Hurricanes can have a lasting effect on refinery and industry demand", said Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt.

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

Traders said it would take weeks for the USA petroleum industry to return to full capacity, and that under the current conditions it was hard to identify fundamental market trends. It is predicted to hit Florida by Saturday.

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

"With another hurricane threatening to hit the U.S. coast, traders still remain cautious".

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