Oil prices rose on Monday as key U.S. refineries began restarts following Hurricane Harvey, which may help revive crude oil processing, while fuel prices fell as Hurricane Irma is likely to clip demand for gasoline and diesel.
The possibility of an extension to the 15-month production pact between members of the Organization of the Petroleum Exporting Countries and non-OPEC producers also helped to support prices, traders said.
Brent crude oil futures settled up 6 cents, or 0.1 percent, to $53.84 a barrel while U.S. West Texas Intermediate crude rose by 59 cents, or 1.2 percent, to $48.07.
Hurricane Irma knocked out power to over 7.3 million in Florida, Georgia, South Carolina and Alabama, according to state officials and utilities on Monday. That has raised concerns about demand, as storms tend to cut down on driving, particularly as many cars have been destroyed.
Both U.S. product futures ended lower – gasoline dropped 0.7 percent and heating oil fell 1.4 percent.
Harvey is still likely to be a bigger driver for the crude market, analysts at Goldman Sachs said. A quarter of U.S. refining capacity to be taken off-line due to the hurricane, sapping demand. Refining runs on the U.S. Gulf Coast hit a record low in the week to Sept. 1, just after the storm, due to shutdowns. Read More…