Saudi to supply full crude allocations to most Asian refiners

Saudi to supply full crude allocations to most Asian refiners

Saudi to supply full crude allocations to most Asian refiners

Oil prices have been experiencing some downward trend during the last two weeks as commerce and energy demand in the USA were hit by hurricanes Harvey and Irma, two of the most powerful storms in a century.

On Monday, oil prices dropped on worries that Hurricane Irma's pounding of populated areas in Florida could hinder oil demand in the world's main oil consuming nation.

Hurricane Irma is expected by Goldman Sachs to have a negative impact on oil demand, but the firm said it sees a larger hit to oil demand from hurricane Harvey, "given the large concentration of energy-intensive petrochemical activity in its path".

Saudi Arabia is likely taking advantage of the lower refinery run rates and ample crude inventories in the United States in the wake of Hurricane Harvey, to redirect the allocation cuts from Asia to the United States, a trader who specializes in Middle East crude supplies said.

Iran sold its light crude oil at $50.93 per barrel in the week ended on September 1, with seven cents decrease from its previous week, IRNA reported on Saturday.

Hurricane Irma, which has been moving inland over the southeastern parts of the U.S., has affected at least nine states so far, among them Florida, Georgia, Alabama and SC, causing storm surges and flooding and cutting off power supplies.

Irma hit Florida on Sunday morning as a unsafe Category 4 hurricane.

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Now many refineries are restarting, including the largest USA refinery.

"The oil market reacted to the Saudi talks", said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo.

Saudi Arabian Energy Minister Khalid al-Falih discussed with his Venezuelan and Kazakh counterparts the possible extension of the global oil supply cut pact beyond March 2018, the Saudi energy ministry said on Sunday.

The deal agreed late a year ago to reduce output by about 1.8 million bpd until March 2018 helped to keep prices as high as $58 a barrel in January, but they have since sagged as global stocks have not fallen as quickly as expected.

Mr Al Falih and Mr Al Mazrouei agreed that an extension of the output cuts beyond March 31 "may be considered in due course as fundamentals unfold", according to the Saudi ministry.

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 in one of the statements.

Information for this article was contributed by Sharon Cho, Wael Mahdi and Jessica Summers of Bloomberg News.

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