Oil prices rise amid sharp decline in U.S. output

Oil prices rise amid sharp decline in U.S. output

Oil prices rise amid sharp decline in U.S. output

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.

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

Meanwhile, rising USA inventories also weighed on the market.

Brent crude futures, the benchmark for oil prices outside the United States, were up 24 cents at $54.73 a barrel, just shy of their Friday peak of $54.79 a barrel, their highest level since April.

Energy prices have continued to gain support from a weak dollar with the USA currency sliding to a 31-month low on a trade-weighted basis.

An emailed market report from London oil broker PVM said Hurricane Irma was the "obvious" center of market attention on Friday morning. Brent found some support from news that Saudi Arabia will trim oil supply allocations to its customers worldwide in October by 350,000 barrels per day (bpd).

US crude supplies are expected to stay elevated because at least 1.4 million barrels per day of refining capacity could still be offline past mid-September, Goldman Sachs analysts said in a note on Wednesday.

"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.

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U.S. Gulf Coast utilization rates dropped to 63.4 percent, the lowest rates since the EIA began collecting the data in 2010.

Reflecting the impact of Harvey which hit the Gulf Coast on August 25, the EIA said US oil refinery utilization rates slumped 16.9 percentage points to 79.7 percent last week, the lowest rate since 2010.

Anadarko Petroleum, one of the largest operators in the U.S. Gulf of Mexico, said it pulled non-essential staff from its platforms in the eastern Gulf of Mexico as a precautionary measure against Irma.

Oil prices jumped up on September 8 following the data on the slowdown of the USA refineries in the Gulf of Mexico region after the Hurricane Harvey.

Drillers cut three oil rigs in the week to September 8, bringing the total down to 756, the least since June.

Money managers raised their net long U.S. crude futures and options positions in the week to September 5, the U.S. Commodity Futures Trading Commission (CFTC) said.

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

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