Oil Gains as Irma Weakens to Storm While US Refining Returns

Data released by the Energy Information Agency (EIA) showed US commercial crude inventories rose by 5.9 million barrels in the week through September 8, almost doubling analysts' estimates for a rise of 3.2 million barrels.

The Saudi Arabian energy minister Khalid Al Falih agreed with his Venezuelan, Kazakh and UAE counterparts to keep all options open in their push to re-balance world oil markets, including the possible extension of output cuts beyond next March.

The IEA's stronger demand estimates have helped lift oil prices, Matthew Beck, managing director of a $8-billion oil and natural gas bond and private-equity portfolio at John Hancock Financial Services Inc.in Boston, said by telephone.

According to the report, the value of Iranian heavy crude was further lifted buoyed again by an uplift in OSP offsets and supported by healthy global sour markets.

Crude oil prices were higher early Wednesday after the IEA said the level of oil and petroleum products on the market could dip below the five-year average.

The United States West Texas Intermediate crude futures fell 7 cents or about 0.2 percent to $48.16 per barrel. The U.S. and the Euro-zone should rise in growth by 2 percent next year. "As a result, an extension of its production pact beyond the current March 2018 deadline is all but guaranteed", he added.


Oil exports from member countries have also declined, but by a significantly smaller margin than production cutbacks.

It was the first fall in global production in four months. That would come on top of the stockpile growth of 4.6 million barrels officially reported in the previous week to Sept 1 by the U.S. Energy Information Administration.

The data seems to have been enough to put a temporary cap on Tuesday's rally that was fueled by reports of lower production from OPEC in August.

Gasoline stocks fell by 8.4 million barrels, compared with analysts' expectations in a Reuters poll for a 2.1 million-barrel drop.

OPEC and other producers, including Russian Federation, have agreed to reduce output by about 1.8 million bpd until next March in a bid to reduce global oil inventories and support oil prices. In July, OECD stocks declined by 19 million barrels to 3.02 billion barrels but stocks remain 219 million barrels above the 5-year average.


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