A worker checks the valve of an oil pipe at Nahr Bin Umar oil field, north of Basra, Iraq. Reuters
Oil prices edged lower on Monday on concerns that Hurricane Irma's pounding of heavily populated areas of Florida could dent oil demand in the world's top oil consuming nation. Losses were capped by weekend talks between Saudi Arabia's oil minister and counterparts over a possible extension to a pact to cut global oil supplies beyond next March.
Brent crude oil futures for November delivery LCOc1 were up 5 cents at $53.73 a barrel while benchmark US West Texas Intermediate crude CLc1 advanced by 32 cents to $47.80. Hurricane Irma knocked out power to nearly four million Florida homes and businesses on Sunday after millions were told to evacuate ahead of the storm.
"We believe that Irma will have a negative impact on oil demand but not on oil production or processing," Goldman Sachs analysts said in a note. Irma is forecast to weaken to a tropical storm over northern Florida or southern Georgia later on Monday.
It comes on the heels of Hurricane Harvey, which struck the U.S. oil hub of Texas two weeks ago, knocking out a quarter of the nation's refineries, many of which are now restarting operations. The two hurricanes are expected to inflict a "bearish shock" on oil demand in September of about 600,000 barrels per day (bpd), Goldman said.
The longer-term focus, however, was on discussions over a possible extension to the 15-month production pact between members of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers including Russia and Kazakhstan. The deal aims to curb an oil supply glut that has weighed on crude prices for more than three years.
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