Oil ends higher as market assesses Irma's demand impact

Crude Oil

October WTI Crude Oil closed at $47.48, up $0.19 or +0.40% and December Brent Crude Oil settled at $53.58, up $0.79 or +1.50%.

It comes on the heels of Hurricane Harvey, which struck the U.S. oil hub of Texas two weeks ago, knocking out a quarter of the nation's refineries, many of which are now restarting operations.

Hurricane Harvey hit the U.S. Gulf coast two weeks ago, and crude prices initially slumped because nearly a quarter of the country´s huge refinery industry was knocked out by the storm, cutting demand for crude oil, refining´s lifeblood.

If last Friday's sell-off is any indication, crude oil prices are likely to be under pressure this week as investors react to the impact of Hurricane Irma on near-term demand for gasoline and crude oil.

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

Bloomberg news agency reported that as of September 8, only 8 percent of the oil refining capacity remained withdrawn after the Hurricane Harvey.

Hurricane Harvey has killed more than 40 people and brought record flooding to the United States oil heartland of Texas, paralyzing at least 4.4 million barrels per day (bpd) of refining capacity, according to company reports and Reuters estimates.

According to the U.S. Energy Information Administration, U.S. weekly crude stocks increased 4.6 million barrels the week-ending September 1, topping analysts' forecast for a 4.0-million-barrel build in a Reuters poll.

Meanwhile, Russian Deputy Prime Minister Arkady Dvorkovich said that the option to extend Russia's participation in the OPEC + agreement on reducing oil production will depend on the results of monitoring the market in April 2018.

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

Hurricane Irma hit the Dominican Republic and Haiti on Friday, heading for Cuba and the Bahamas.

Futures were little changed in NY, up 3.7% for the week.

Imports into the Gulf Coast region last week fell to the lowest in records going back to 1990, and nationwide crude output fell below 9 million barrels a day for the first time since February. In the previous week, speculators had cut their bullish bets to a two-month low as Harvey made landfall.

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