Oil steady as United States refining demand rises but ample crude supplies weigh

Brent oil price starts to rise

US West Texas Intermediate (WTI) crude futures were at $48.98 barrel, 11 cents below their last settlement.

Late in the week, oil futures traded mixed, with Brent rising to a 5-1/2 month high while USA crude slipped on a bigger-than-expected crude stock build as the restart of US refiners after Hurricane Harvey was countered by the threat of Hurricane Irma.

US crude settled down $1.61, or 3.3 percent, at $47.48 a barrel.

As of Wednesday, about 3.8 million barrels of daily refining capacity, or 20 percent of the USA total, was shut in, though a number of refineries and petroleum-handling ports were restarting. Its crude exports in August were 25.19 million barrels per day, their lowest since April, according to Thomson Reuters Oil Research.

Some oil traders in Asia are looking to snap up crude cargoes from the United States after Hurricane Harvey closed US refineries, denting local demand and pushing out the price spread between U.S and Atlantic Basin crude benchmarks. As of late Thursday, data from S&P Global Platts showed that 12.8% of USA refinery capacity was down due to the storm.

"Imports (of oil) to the U.S. Gulf Coast fell to levels not seen since the 1990s", ANZ bank said.

Focus was shifting to three other hurricanes that are now tearing through the Caribbean and Gulf of Mexico. U.S. oil output fell by nearly 8 per cent, from 9.5 million barrels per day (bpd) to 8.8 million bpd, according to the Energy Information Administration.

"Demand may continue to be distorted as multiple hurricanes make their way across the Caribbean", said Jeffrey Halley, senior market analyst at futures brokerage OANDA.

With storm Katia about to hit the Mexican Gulf coast, there are three major hurricanes now active in the region. Current models show Irma making landfall in Florida by Sunday morning and soaking parts of the area with about a foot of rain.

The US National Hurricane Centre (NHC) said that Irma was still a Category 5 hurricane, with wind speeds of 160-185 miles per hours (260-295 km/h). It has already killed 14 and destroyed islands in the Caribbean, with Hurricane Jose heading for the Caribbean Leeward islands, close on the heels of Irma.

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