Crude oil prices fell in Asia on Tuesday with industry estimates of US inventories expected to show a leap as stocks build from Gulf Coast refinery shutdowns in the wake of Hurricane Harvey.
There were further expectations that USA refineries would continue to resume output gradually with Motiva facility starting to restart production.
Expectations for a hefty weekly rise in USA crude-oil supplies limited the price rise for oil, however. Mark Zandi, the chief economist at Moody's Analytics, said the US economy could suffer lost revenue from the storms and the estimate for third-quarter gross domestic product could drop a half point to 2.5 percent as a result.
Last week, Goldman Sachs said that reconstruction in Hurricane Harvey's aftermath was expected to be ultimately positive for United States oil demand in a few months, as fuel consumption is expected to increase when people start rebuilding homes. Refining runs on the U.S. Gulf Coast hit a record low in the week to September 1, just after the storm, due to shutdowns.
Now many refineries are restarting, including the largest USA refinery.
An estimated 2.6-2.7 million b/d (14-15% of total US) refining capacity remained shuttered in Texas as of Monday local time, according to our estimates based on reports from the companies, the Department of Energy, and the media.
Oil prices dropped on Monday on concerns that Hurricane Irma's pounding of heavily populated areas of Florida could dent oil demand in the world's top oil-consuming nation. U.S. West Texas Intermediate (WTI) crude CLc1 declined 30 cents at $47.77 a barrel.
"Irma will have a negative impact on oil demand but not on oil production or processing", Goldman analysts said in a note, Oil Price reported.
Output by OPEC's 14 member countries fell in August by 79,000 barrels per day (bpd) from July to 32.76 million bpd. The producers are seeking to strengthen compliance with the reduction accord they reached a year ago.
Falih agreed in separate talks with the ministers in the Kazakh capital Astana that steps taken by OPEC and other major crude producers such as Kazakhstan have contributed to better market stability, three emailed statements from the Saudi Energy Ministry showed.