Oil Prices Steady As Irma Heads For Florida, Saudi Arabia Cuts Supply

Oil Prices Steady As Irma Heads For Florida, Saudi Arabia Cuts Supply

Oil prices edged lower early on Thursday, after rising more than 1% to four-week high in the prior session, as investors looked ahead to weekly data from the US on stockpiles of crude and refined products to weigh what the impact of Harvey was on supply and demand.

United States gasoline stockpiles shrank last week as refineries were shuttered as Hurricane Harvey approached the Texas coast and the offloading of imported cargoes was interrupted.

It will take weeks for the USA petroleum industry to return to full capacity, analysts say.

In the case of Irma, analysts are more anxious that devastation wrought by the storm could sharply reduce demand for energy.

The US Energy Information Administration said on Thursday US weekly crude stocks increased 4.6 million barrels last week, topping analysts' forecast for a 4.0-million-barrel build in a Reuters poll.

Brent futures LCOc1 gained 29 cents, or 0.5%, to settle at US$54.49 a barrel, its highest close since April 18 for a second day in a row.

"Hurricane Irma is already impacting the natural-gas market with demand out of the southeast region dropping roughly 1.5 [billion cubic feet a day] over the past 24 hours", said Robbie Fraser, commodity analyst at Schneider Electric.

Crude imports fell by 822,000 barrels per day to 7.1 million barrels per day.

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

"Irma looks like it will miss the key Gulf areas, and we're more anxious about shale", said Mark Watkins, regional investment manager at U.S. Bank.

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

Gasoline refineries were interrupted along the Texas coast, denting demand for crude oil.

Hurricane Irma, which has become one of the biggest storms ever measured - picking up the Twitter hashtag #irmageddon - early on Friday was over the Dominican Republic and Haiti, heading for Cuba and the Bahamas.

It was predicted to hit Florida by Saturday.

Meanwhile, investors kept an eye on the Category-5 storm Hurricane Irma, which is moving towards the Caribbean and Florida in south US and could knock out refineries and cause fuel shortages.

Hurricane Jose is heading for the Caribbean Leeward islands, which have just been devastated by Irma.



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