Opec sees higher oil demand in 2018

US Hurricanes Affecting Oil Prices, Saudi Could Cut Output
Hurricanes Harvey and Irma to support crude oil prices; buy on dips
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14 September, 2017

Futures gained as much as 1.8% in NY.

On the other hand, also supporting the oil prices, was the fact that OPEC production dropped in August for the first time in five months, following production disruptions in Libya and other OPEC members producing less crude. Plus, the cartel and its allies are said to be considering an extension of their output-cut deal beyond March.

Oil prices are weighed down by concerns the world has reached the limits of demand, which is crippling valuations more than the threat from electric cars and national policies geared at banning vehicles running on gasoline and diesel in the future, according to RBC's chief commodities strategist. This comes as all reporting agencies saw an improvement in OPEC compliance, even OPEC themselves. Production among the Organization of the Petroleum Exporting Countries fell from its 2017 peak in July as the bloc took efforts to comply with its previous agreement.

The front-month contract in US crude's West Texas Intermediate (WTI) benchmark settled up $0.59, or 1.2%, at $48.07 per barrel on the New York Mercantile Exchange. Total volume traded was about 3% below the 100-day average.

The full effects of the storm pushed gasoline pump prices up by 28 cents per gallon to a national average of $2.68 a gallon on September 4.

The S&P 500 Energy Index climbed as much as 1.2%, with Chesapeake Energy Corp. jumping 8%, while Pioneer Natural Resources Co. and Devon Energy Corp. gained more than 3.5%.

The spread, or difference, between WTI and Brent has widened in recent weeks because some crude oil in the United States remains locked in storage.

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"The drop in U.S. oil refining is also to be offset by higher processing at other nations, so worries over a substantial cut in crude oil demand are fading".

On September 10, Saudi Arabia's energy minister discussed a possible extension of the production cut deal beyond March 2018 with Venezuela and Kazakhstan.

USA crude futures CLc1 added to gains late in the session, boosted by expectations that recovering refineries will process more crude.

Both U.S. product futures ended lower - gasoline dropped 0.7 percent and heating oil fell 1.4 percent. Cushing, Oklahoma supplies rose by the most since March, while oil production climbed by the most since 2012.

"It's hard to say whether they'll go through with it at this moment".

Refinery utilization rates fell by 2 percentage points to 77.7 percent, the lowest rate since 2008, as crude runs fell 394,000 bpd, EIA data showed.


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