Will Saudi Arabia Extend the Output Cut Deal?

Marathon Petroleum Corp. oil storage tanks sit at a terminal in the Ybor Channel ahead of Hurricane Irma in Tampa Florida U.S. Sept. 9 2017

US Hurricanes Affecting Oil Prices, Saudi Could Cut Output

OPEC and Russian Federation have also said they would cut oil production by 1.8 million barrels per day, as a supply glut continues and Iran prepares to boost its output.

USA crude futures rose 0.9% to $48.68 per barrel.

On Friday, WTI lost 3.3%, causing its discount to Brent to blow out to beyond $6 a barrel, the highest for 2017.

Oil rose as Irma weakened to a tropical storm after hitting Florida, while Gulf Coast refining continued to recover following storm Harvey.

Monday's gains came as Hurricane Irma struck the USA southeast with less force than once feared, easing worries that energy demand would be hit hard.

The largest refinery in the U.S.in Port Arthur Texas is now running at reduced rates, sources told Reuters on Tuesday.

For months, the oil cartel OPEC has anxious about what it should be doing as its plan to restrict its collective crude production (and hopefully kick off a price rebound) was failing.

Supply is also said to have been hampered by Hurricane Harvey in the USA, which caused refineries to shut.

Data from the U.S. Energy Information Administration Wednesday showed that domestic crude supplies climbed by 5.9 million barrels for the week ended September 8.

The global surplus of crude and stocks over the five-year average fell to 190 million barrels. The EIA's next weekly report is due on Wednesday.

The VanEck Vectors Oil Services ETF (NYSEMKT: OIH) traded up about 1.7%, at $22.27 in a 52-week range of $21.70 to $36.35.

"Based on recent bets made by investors, expectations are that markets are tightening and that prices will rise, albeit very modestly", the agency said.

USA crude futures added to gains late in the session, boosted by expectations of a steady rebound in refining capacity.

Among persistent glut worries, Saudi Arabian Energy Minister Khalid al-Falih had discussions with his Venezuelan and Kazakh counterparts about the chances of extending supply cuts through March 2018. According to the EIA, the lower refinery demand for crude oil and limited ability to move crude oil resulted in crude oil inventory builds at Cushing, Oklahoma, and the Gulf Coast of 800,000 barrels and 1.7 million barrels respectively as of Friday, September 1. The next OPEC ministerial meeting to discuss production policy is scheduled for November 30. The commercial crude inventory remains in the upper half of the average range for this time of year.

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