Harvey, Irma Forecast to Cut Oil Demand by 900000 bpd

Marathon Petroleum Corp. oil storage tanks sit at a terminal in the Ybor Channel ahead of Hurricane Irma in Tampa Florida U.S. Sept. 9 2017

Saudi Arabia open to another OPEC cuts extension

The hurricane knocked out power to almost 4 million homes and businesses in Florida on Sunday. It gradually lost strength and weakened to a tropical storm by Monday morning as it headed towards Georgia.

Brent for November settlement climbed 40 cents to $54.24 a barrel on the London-based ICE Futures Europe exchange.

The longer-term focus, however, was on a possible extension to the 15-month production pact between members of the Organization of the Petroleum Exporting Countries and non-OPEC producers including Russian Federation.

Hurricane Harvey disrupted refinery production in Texas last month-one reason USA crude futures have been lower than the global benchmark.

"The market is assessing what is happening after the two hurricanes and there is concern that demand is down in Florida", said Miswin Mahesh, an oil market analyst at Energy Aspects.

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's hard to know at this point, but Harvey and Irma have likely caused a combined $150 billion to $200 billion in damage to Texas and Florida", Zandi said in a statement Monday.

OPEC said inventories were falling and that an increase in the price of Brent crude for immediate delivery to a premium over that for later supplies, known as backwardation, raised hopes that a long-awaited market rebalancing was under way.

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 world demand for oil in 2018, as expected by OPEC, will be 1.35 million barrels per day higher than in the current year, and amount to 98.12 million barrels.

Weekly U.S. inventories data will be able to shed some light on the hurricanes' impact.

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. That is "because Texas has twice the oil consumption per capita of Florida given the significant concentration of refining and petrochemical capacity on the U.S. Gulf Coast", they said.

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