Oil prices rose on Wednesday as strong global refining margins and the reopening of U.S. Gulf Coast refineries provided a more bullish outlook after sharp drops due to Storm Harvey.
gained 28 cents to $53.66 a barrel by 09:52 GMT. U.S. West Texas
Intermediate (WTI) crude futures were up 15 cents at $48.81.
Harvey was bearish for crude and speculators went massively short WTI
but now there is a reversal to positions pre-Harvey. Strong margins are
helping underpin crude ... gasoil is at its highest point this year,”
Olivier Jakob of Petromatrix consultancy said.
refineries, pipelines and ports that were knocked out by Harvey 10 days
ago are restarting. As of Tuesday, about 3.8 million barrels per day
(bpd) of refining capacity, or 20 percent of the U.S. total, was shut.
This compares with 4.2 million bpd at the height of the storm.
was also being drawn to the Category 5 storm Hurricane Irma, which is
barreling toward the Caribbean and Florida and could knock out other
refineries and cause more fuel shortages.
barrels of daily refining capacity in the Dominican Republic and Cuba
lies in the immediate path of Irma, Thomson Reuters Eikon data showed.
storage data due on Wednesday from the American Petroleum Institute and
on Thursday from the Energy Information Administration is expected to
give a better view of the extent of Harvey’s impact on U.S. fuel
inventories, although analysts say it will take a few weeks longer to
get a complete picture.
There is also another tropical storm on Irma’s heels in the Atlantic, and another one active in the Gulf of Mexico.
the oil industry outlook is for ample supplies and low prices as crude
output remains high in the three biggest producing regions: Russia, the
Middle East and North America.
Russian Energy Minister
Alexander Novak said on Wednesday he expects the 2018 price of Brent to
be $45 to $55 per barrel. Analysts said oil companies had adjusted to
lower prices by cutting costs and thanks to improved refinery margins.
oil majors are looking more comfortable at lower oil prices, posting
strong quarterly results in Q2 despite weaker upstream revenue,” BMI
Research said in a note.