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Oil Futures Hold Steady amid US Crude Supply Jump, Hurricane Irma

September 7, 2017 at 16:48 by Andrew Moran

With Hurricane Irma on the cusp of making landfall and new government data showing an increase in domestic crude inventories, oil futures are holding steady. Many fear that the latest weather event will impact recovery efforts in the Gulf region that was struck by Hurricane Harvey.

October West Texas Intermediate (WTI) crude futures rose $0.04, or 0.08%, to $49.20 per barrel at 16:31 GMT on Thursday on the New York Mercantile Exchange. US crude has settled on Wednesday at its highest level in a month and has advanced nearly 4% this week.

Brent, the international benchmark for oil prices, is also in the green towards the end of the trading week. November Brent crude futures climbed $0.18, or 0.33%, to $54.38 a barrel on London’s ICE Futures exchange. Brent is poised to settle at its best level since the middle of April.

According to the US Energy Information Administration (EIA), domestic crude supplies increased by 4.6 million barrels for the week ending September 1. This is the first increase in 10 weeks and beats initial forecasts of 2.7 million barrels. The EIA further reported that gasoline stockpiles tumbled 3.2 million barrels, while distillate stockpiles fell 1.4 million barrels.

Moreover, US government data reported that crude-oil refinery inputs declined by 3.3 million barrels per day (bpd). As the Gulf attempts to return to normal, refiners are operating at just under 80% capacity.

The region is contending with the aftermath of Hurricane Harvey, but now Florida will come to grips with Hurricane Irma, one of the largest weather events in recorded US history. This could cause serious disruptions to oil and gas output demand, and may place a shadow over the Harvey recovery.

Investors will be paying close attention to Irma and the oil industry over the next couple of weeks. Weather officials are already monitoring Tropical Storm Jose, which is following Irma in the Atlantic.

If you have any questions and comments on the commodities today, use the form below to reply.

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