Oil mixed, but erratic, on United States weather impacts and demand scenario

OPEC may attract new members to oil production cut deal

Better still, the agency stated that "Depending on the pace of recovery for the us refining industry post-Harvey, very soon OECD product stocks could fall to, or even below, the five-year level". 79,000 bpd won't cut it, but on the demand side there's more working in the favor of a rebalanced market, as OPEC expects oil demand will increase by more than previously expected in 2018.

In the areas affected by the hurricane, gasoline prices rose even more, but they still remained below the national average.

But with oil demand perking up as well as hurricanes and regular summer maintenance knocking out some production, the IEA said it has seen some of that glut disappear.

"OECD demand growth continues to be stronger than expected, particularly in Europe and the USA", the Paris-based IEA said.

Gasoline inventories, according to the EIA fell last week, by 8.4 million barrels, generally in tune with API's estimate of a 7.896-million-barrel decline-and the largest gasoline draw on record. "Expectations are that markets are tightening and that prices will rise, albeit very modestly", it said.




It also forecast oil demand in the Middle East to rise over 2016 levels, as economic momentum gains pace. Kuwait on Wednesday said OPEC could add more non-member countries to the deal, but that an agreement may not be reached at the group's November meeting.

Should OPEC keep pumping at August's rate, the market would see a small supply deficit next year, versus a 450,000-bpd surplus implied by last month's report. The level of compliance with the OPEC pact about reducing the oil production in August rose to 82% compared to the previous value (75%).

After being hurt by Hurricane Harvey, positive sentiments have started building up in the oil space with a wave of positive news.

"Outright benchmark crude prices gained in August, reflecting higher demand in the northern hemisphere and tight physical markets for oil products", the IEA said. In its monthly report, the Organization of the Petroleum Exporting Countries also said the two hurricanes that hit the United States in recent weeks would have a "negligible" impact on demand.

On the other hand, the U.S. West Texas Intermediate or WTI CLc1 was also dragged down by the enormous Hurricane pressure and was losing as much as 30 cents at $47.77 per barrel; while the largest local U.S. refinery, Motiva Port Arthur extends shut down after recuperating from the mass effect of Hurricane Harvey and now Irma.

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