Despite threat by 'clean energy', OPEC says oil demand will increase

Despite threat by 'clean energy', OPEC says oil demand will increase

Despite threat by 'clean energy', OPEC says oil demand will increase

A day earlier the American Petroleum Institute had estimated crude oil inventories had risen for the second week in a row, by a hefty 6.18 million barrels, which was only to be expected as the market is prepared for the Hurricane Harvey effects on Gulf Coast refining to linger for another few weeks. As a result of Hurricane Harvey, many refineries in the region either reduced runs or shut down in its aftermath.

According to PVM's Tamas Varga "If the Harvey impact was potentially and possibly short-term bullish for oil prices the same can not be said about Irma", and that "There is no refinery capacity in the region, therefore, the main concern lies in the hit of oil demand".

US crude settled up $1.07, or 2.2 percent, to $49.30 per barrel and Brent crude was up 89 cents to $55.16 a barrel.

The Energy Information Administration reported that USA crude oil imports averaged 6.5 million barrels per day last week, down by 603,000 barrels per day from the previous week. S. crude stockpiles rose almost twice expected levels last week as refineries cut output following Hurricane Harvey, while gasoline and distillate inventories drew, industry group the American Petroleum Institute said after the market settled.

And while Brent's significant premium over the US benchmark informs analysts that the USA crude market needs more time to return to normal in the wake of Hurricane Harvey, they were mainly buoyed by news from the International Energy Agency that global oil demand is set to accelerate faster than anticipated this year.

OPEC's estimate of its oil production, compiled from four of six external data sets known as secondary sources, fell to 30.0 MMbpd excluding output from Libya and Nigeria, according to a person familiar with the matter.

On one hand, IEA sees stronger oil demand growth in two years.

"The American Petroleum Institute said that crude stockpiles in the United States increased by 6.2 million barrels in the week ending 8 September to 468.8 million".

For months, the oil cartel OPEC has anxious about what it should be doing as its plan to restrict its collective crude production (and hopefully kick off a price rebound) was failing.

Elsewhere, gasoline futures fell 0.59% to $1.6347 a gallon and natural gas futures added 0.23%, to $3.064 per million British thermal units. Texas, where Harvey made landfall, represents 31% of all US refinery capacity, based on data from January 2017.

The assessment echoed a report by OPEC forecasting higher demand for its in 2018 and pointing to signs of a tighter market.

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