Published: Sun, September 10, 2017
Markets | By Erika Turner

Oil prices fall as another hurricane set to hit Caribbean coast

Oil prices fall as another hurricane set to hit Caribbean coast

"WTI may break higher as storms limit crude processing".

The group raise its combined futures and options position in NY and London by 20,525 contracts to 186,421 during the period.

On Friday, oil prices eased after almost a week of steep increases as Hurricane Irma, one of the most powerful storms in a century, is steering towards Florida after ripping through the Caribbean.

West Texas Intermediate for October delivery was at US$49.08 a barrel on the New York Mercantile Exchange, down 1 cent, at 1:36pm in London yesterday.

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. US oil output fell by nearly 8 percent, from 9.5 million barrels per day (bpd) to 8.8 million bpd, according to the Energy Information Administration (EIA). November Brent crude, the global benchmark, lost 44 cents, or 0.8%, to $54.05 a barrel on ICE Futures Europe, with prices up around 2.5% for the week.

US crude production output fell nearly 8 percent because of Harvey, from 9.5 million barrels per day (bpd) to 8.8 million bpd, according to the Energy Information Administration (EIA).

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

Gasoline refineries were interrupted along the Texas coast, denting demand for crude oil. Nationwide crude output slid by 749,000 barrels a day to 8.78 million a day. Yet another hurricane, Katia, is in the Gulf of Mexico.

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.

Even as the oil industry continues to grapple with the fallout from Harvey, a much bigger Hurricane was lashing the Caribbean islands and heading for the United States.

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

"Demand may continue to be distorted as multiple hurricanes make their way across the Caribbean", said Jeffrey Halley, senior market analyst at futures brokerage OANDA.

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