Oil prices inch lower as demand remains subdued

Harvey's impact will be felt all over the globe

The latter's more stable showing was reportedly due to several US refineries restarting operations in the wake of Hurricane Harvey; the poor market showing overall is also said to have been influenced by the Labour Day holidays in many countries.

The impact from Hurricane Harvey will continue to be felt on the oil markets over the coming week due to the widespread disruption caused to the oil industry across Texas Gulf Coast, analysts said.

Producers shut down the country's two largest refineries: Motiva's 603,000-barrel-per-day facility in Port Arthur, Texas, and ExxonMobil's 560,500-barrel Baytown, Texas refinery. Several others, including Marathon's Galveston Bay and Citgo's Corpus Christi refineries, were running at reduced rates, according to company reports and Reuters estimates. U.S. West Texas Intermediate (WTI) crude futures were up 55 cents at 49.21 dollars a barrel.

Brent crude futures slipped by 3 cents as traders are still apprehensive in investing in oil, a riskier asset compared with the safe investment in gold, following North Korea's powerful nuclear test.

Meanwhile, Hurricane Irma is heading for the Caribbean islands of Antigua, Barbuda, Anguilla, Montserrat, St. Kitts and Nevis, the Virgin Islands, Puerto Rico, the Dominican Republic, and parts of Cuba.

Losses in US supply capability have catapulted retail prices to their highest levels since August 2015, but remain well below the first weeks of September 2011 through 2014, AAA said.

"Maximum sustained winds are near 185 miles per hour (295 km/h) with higher gusts".

The Energy Department released approximately 4.5 million barrels of oil from the Strategic Petroleum Reserve Friday to limit the effects from Harvey, which began as a Category 4 hurricane but was later dialed down to a tropical storm after slamming headlong into southeast Texas. Harvey has passed, but new storms in the Gulf of Mexico and Atlantic Ocean are threatening to dump more rain on the Gulf Coast.

Crude oil rose, and gasoline fell to the lowest in more than a week, as Gulf Coast refiners continued their recovery from the devastation of Hurricane Harvey.

The Valero Energy Corp. oil refinery stands after Hurricane Harvey in Texas City on August 29. About a quarter of USA refining capacity was shuttered.

Some crude oil pipelines have restarted operations. Another million barrels had already been approved for shipment, the report said.

Overall trading activity in oil futures market is expected to be low on Monday due to the U.S. Labor Day public holiday.

Brent crude ended $1.04, or 2 percent, higher at $53.38 per barrel.

The deal, which was extended in May until March 2018, has been undermined by falling compliance, growing US output and an unexpected surge in production from Libya and Nigeria - two member states exempted from the agreement because their oil industries had been damaged by civil unrest. It indicates that demand for crude oil at refineries will likely increase, while a shortage of gasoline, and the recent rise in prices at the pump, is likely to ease, Marketwatch reported Tuesday. However, some are arguing that the hurricane will have a limited effect on gasoline and crude demand since the USA driving season is over.

Related news: