Oil Turns Higher After OPEC Reports Output Turned Lower

Oil Turns Higher After OPEC Reports Output Turned Lower

Hurricane Irma is expected by Goldman Sachs to have a negative impact on oil demand, but the firm said it sees a larger hit to oil demand from hurricane Harvey, "given the large concentration of energy-intensive petrochemical activity in its path".

West Texas Intermediate crude for October delivery rose 59 cents to settle Monday at $48.07 barrel on the New York Mercantile Exchange.

Iran sold its light crude oil at $50.93 per barrel in the week ended on September 1, with seven cents decrease from its previous week, IRNA reported on Saturday.

The report also said OPEC's output in August declined by 79,000 bpd from July to 32.76 million bpd, citing figures from secondary sources such as consultants and oil-industry media.

The uptick in sentiment on oil prices comes against concerns that falling US oil demand could weigh on crude futures in the wake of Hurricane Irma which made landfall in the USA over the weekend.

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

Meanwhile, monthly reports from the Opec and International Every Agency due Tuesday and Wednesday, respectively, are expected to provide market participants with an update on Opec production and global demand forecasts.

"It is clear that the rebalancing process is underway, supported by the high conformity levels of OPEC member countries and participating non-OPEC countries to the production adjustments" in the cooperation agreement, OPEC secretary general Sanusi Barkindo said in a speech in Oxford on Monday.

A Reuters poll of six analysts taken ahead of inventory reports forecast that crude stocks likely rose by 2.3 million barrels in the week ended September 8.

The market is also watching closely for US inventories data in the wake of recent storms.

Markets will be influenced later in the day when the U.S. Energy Information Administration releases its short-term market report, which includes forecasts for crude oil prices.

Crude oil prices were mixed in Asia on Monday as investors focused on prospects of another extension for an OPEC-led oil cut into the middle of next year and as Hurricane Irma struck Florida with less force than feared.

After Hurricane Harvey halted nearly a quarter of the nation's refining capacity, crude prices in NY slumped as gasoline prices soared. Some OPEC and non-OPEC ministers have been in discussions in recent days over their production cut strategy, with one of the options on the table being to extend the output restraint agreement beyond its current expiration at the end of March 2018.

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