Oil Prices Drop On Demand Worries After US Hurricanes

US Hurricanes Affecting Oil Prices, Saudi Could Cut Output

Nymex reformulated gasoline blendstock-the benchmark gasoline contract-rose 0.9% to $1.65 a gallon.

US crude for October delivery was up 41 cents, or 0.9 percent, at $47.89 a barrel by 0648 GMT, having tumbled 3.3 percent on Friday.

Gold is retreating as the safe-haven demand fades.

London Brent crude for November delivery was up 30 cents, or 0.6 percent, at $54.08, having settled down 1.3 percent.

Oil prices have been experiencing some downward trend during the last two weeks as commerce and energy demand in the US were hit by hurricanes Harvey and Irma, two of the most powerful storms in a century.

Commenting on the impact on oil production of hurricane Harvey, OPEC said "the United States energy industry appears to be rebounding quickly".

Though US production growth may be starting to slow down, the combined effect of incremental barrels from the country's shale producers over the past nine months, along with a boost in supplies from Libya and Nigeria in recent months, as these OPEC members remain exempt from production cuts, continues to countervail a big portion of the OPEC/non-OPEC cuts. The North American benchmark WTI is now trading at $47.8 per barrel and Brent at $5 per barrel premium to WTI.

To take note of, both Saudi energy minister Khalid al-Falih and his Venezuelan counterpart, Eulogio del Pino, reportedly said their two countries were already exceeding their commitments under the output cut deal.

Hurricanes have shaken energy markets, with Irma shutting fuel stations and ports across Florida and Harvey strangling refineries in the nation's energy hub.

"You just went through two major events, two hurricanes, and there are no events on the horizon to get you excited", Michael Hiley, head of over-the-counter energy trading at New York-based LPS Partners, said by telephone. "That's why you have to look out further". The American Petroleum Institute releases its own weekly inventory report late Tuesday.

Irma hit Florida on Sunday morning as a unsafe Category 4 hurricane.

Six analysts polled ahead of inventory reports from industry group the American Petroleum Institute (API) and the U.S. Department of Energy's Energy Information Administration (EIA) estimated, on average, that crude stocks likely rose 2.3 million barrels in the week ended September 8. The Kingdom's own data is, as often happens, more positive than that, suggesting an average output of 9.95 million bpd.

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.

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