Oil prices climb for 2nd day as OPEC report shows production drop

US Hurricanes Affecting Oil Prices, Saudi Could Cut Output

US Hurricanes Affecting Oil Prices, Saudi Could Cut Output

EIA also revised its 2017 and 2018 USA oil output forecast figures lower to reflect, in part, effects of Hurricane Harvey. 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.

Cushing inventories recorded a build of 1.02mn barrels on the week which was close to consensus expectations.

In November a year ago, when OPEC members agreed to cut production for the first time since the Great Recession, it was welcomed with great optimism and oil price jumped more than 20 percent, from $45 per barrel to as high as $55 per barrel (WTI).

Oil prices hung onto earlier gains as government data showed US crude stocks rose sharply last week.

Also ahead, the Organization of Petroleum Exporting Countries' monthly report to assess global supply and demand levels is due. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up around 0.6%, at $47.78 a barrel. In Europe, ARA product stocks rose 1.4% last week but are 2.8% lower y/y at 44.64 million barrels.

Royal Dutch Shell Plc's Deer Park, Texas, refinery was said to have some units heating up in preparation for restarting this week, according to a person familiar with operations. Inventories of gasoline and distillate were expected to fall 4 million barrels and 300,000 barrels, respectively. Some OPEC and non-OPEC ministers have been in discussions in recent days over their production cut strategy, with one of the options on the table being to extend the output restraint agreement beyond its current expiration at the end of March 2018.

Oil prices were mixed early today, but largely held on to gains in the previous session after Opec said it expected higher demand for its crude next year.

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.

Since the drop in Libya's oil production has persisted into September, I would not expect a significant rise in OPEC-14's crude oil production just yet.

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