Saudi Arabia, UAE, Venezuela open to extending oil production cuts

Saudi Arabia, UAE, Venezuela open to extending oil production cuts

NEW YORK: Oil prices rose on Monday as key US 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. "There is no refinery capacity in the region therefore the main concern lies in the hit of oil demand".

"If the Harvey impact was potentially and possibly short-term bullish for oil prices the same can not be said about Irma", PVM analyst Tamas Varga said in a note. The post-storm recovery will likely bring oil demand to a higher level, gradually offsetting the negative impact, Goldman Sachs said.

Irma slammed into Florida on Sunday, leaving more than 7.4 million homes and businesses without power, but has since been downgraded to a tropical storm. Gasoline supplies had been crimped since late last week as several ports in Florida closed down operations fully or partially in preparation for Irma; now the flooding in different states is expected to curb demand for the transportation fuel too. 5. Harvey slashed refining capacity across Texas, forcing shutdowns of key refineries from Corpus Christi and Houston to Port Arthur, including the largest US fuel-making plant.

Brent crude oil futures for November delivery LCOc1 dropped 31 cents at $53.47 a barrel while benchmark U.S. West Texas intermediate crude CLc1 increased by 22 cents to $47.70 a barrel.

Saudi Arabia and Venezuela, both members of OPEC, agreed to consider prolonging production cuts "beyond the first quarter of 2018, if needed", the Saudi ministry said in one of the statements.

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"The oil market reacted to the Saudi talks", said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo.

OPEC and other producers, including Russian Federation, have agreed to reduce crude output by about 1.8 million barrels per day through the end of next March in a bid to reduce global oil inventories and support oil prices. The producers are seeking to strengthen compliance with the reduction accord they reached past year.

Falih and the Minister of Energy of the United Arab Emirates, Suhail al-Mazroui, held a meeting in Astana, at which both men discussed oil market dynamics and "expressed satisfaction with improving market fundamentals", the statement said.

The Saudi Energy Ministry said that Bozumbayev, who met with Falih on Sunday, said that despite the gradual ramp up of the Kashagan field this year, "Kazakhstan was able, through reducing production in other fields in August, to achieve more than full conformity" with its output cut target.

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