We believe that Irma will have a negative impact on oil demand but not on oil production or processing.
World oil demand growth in 2017 is expected to rise by 1.42 million barrels per day (mbpd) after an upward revision of around 50,000 barrels per day (tbpd), according to Opec Monthly Oil Market Report (MOMR). 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 spread could push USA producers to find more export opportunities for US crude.
In the midst of unstable refinery operations due to Harvey, nationwide gasoline stockpiles slid by 8.43 million to 218.3 MMbbl last week, the lowest level since December 2015, a report Wednesday from the Energy Information Administration showed.
U.S. West Texas Intermediate and international-benchmark Brent crude oil settled higher on Tuesday.
Analysts said the report also indicated OPEC's production-cutting deal with non-OPEC is helping to curb a supply glut. Stephen Brennock, analyst at brokerage PVM, said that OPEC was likely to fall short of its goal of reducing oil stocks to their five year average by the end of the first quarter of 2018, when the deal on production controls is set to expire.
Storm Katia weakens after reaching Mexican coast
According to the 10 a.m. update, Katia was 160 miles southeast of Tampico, Mexico, and 125 miles northeast of Veracruz, Mexico. A turn toward the northwest with a decrease in forward speed is forecast tonight through the weekend.
Irma makes a landfall at Marco Island, Florida
Downgraded to a tropical storm early on Monday, Irma had ranked as one of the most powerful Atlantic hurricanes recorded. CNN's Chris Cuomo and Ed Lavandera reported from Naples, where conditions quickly deteriorated as Irma got closer.
Don't forget Hurricane Jose - and don't return that generator just yet
It provides four times the image resolution of older GOES satellites and will help provide better weather forecasts. These prediction models put Jose anywhere from SC to Newfoundland, or Jose could even move back out into the ocean.
Total gasoline inventories fell by 8.4 million barrels last week, according to the EIA, and remain near the upper limit of the five-year average range.
"Oil inventories are coming down onshore and oil held in floating storage has been declining since June", he said. That's down from an August estimate of 9.91 million barrels.
November WTI crude oil settled at $48.75, up $0.13 or +0.27% and December Brent crude oil finished the session at $54.03, up $0.34 or +0.63%.
The assessment echoed a report by OPEC forecasting higher demand for its oil in 2018 and pointing to signs of a tighter global market.
It was the second continuous production since the Hurricane Harvey shut production in some Gulf of Mexico fields and refineries in Texas, while some domestic manufacturers also cut output to avoid further excess output.
Both U.S. product futures ended lower - gasoline dropped 0.7 percent and heating oil fell 1.4 percent.