Suspension of US Oil Production in Gulf of Mexico Reaches 6%

5% of US Gulf Oil Output Still Shut After Harvey

In the South, a gallon of regular gasoline cost an average of 31 cents more, the AAA motor club reported.

West Texas Intermediate crude for October delivery was at $48.73 a barrel on the New York Mercantile Exchange, up 7 cents, as of 2:57pm in Singapore.

As the remnants of what was once a Category 4 hurricane traversed the region late last week, packing rain and much cooler temperatures, pump prices began to surge due to the refinery and pipeline disruptions caused in Texas.

UBS Group AG trimmed its Brent and WTI price forecasts, citing expectations that the global crude glut will not abate until the middle of 2018, according to a report.

"What happens next in the energy markets will be all about how quickly the refineries come back online, and when downstream operations are restored to normal", Tyler Richey, co-editor of the Sevens Report.

It isn't as though Hurricane Harvey actually made a dent in the ample amount of gasoline available in this country. The price of October futures for WTI crude oil increased by 0.88 percent and stood at $49.09.

Weekly storage data was expected to give a better view of the extent of Harvey's impact on USA fuel inventories although some analysts say it will take a few weeks more to get a complete picture.

More importantly, the Gulf Coast accounts for over 45% of the U.S. oil refining capacity, which has a number of implications. This compares with 4.2 million bpd at the height of the storm. Whether it will make landfall this week is unknown, as there is a possibility it could turn north and avoid the U.S. Mid-Atlantic coast.

Benchmark U.S. gasoline futures fell more than 3 percent, however, as refineries restarted. The previous spot contract, September, jumped 15% in Thursday's session, reaching mid-2015 highs of $2.1678. But the difference between the two moving averages contracted in the trailing week, which could be bullish for crude oil prices.

Overall trading activity in the oil futures market was expected to be low on Monday due to the U.S. Labor Day public holiday.

Signals that the Organization of the Petroleum Exporting Countries could extend its output limits beyond the first quarter of 2018 also boosted prices, as did a weak USA dollar.DXY.

Companies that often ship USA crude to Asia include BP, Chevron Corp, Trafigura, Mercuria and Occidental in addition to North Asian refiners Unipec, PetroChina, JXTG, Cosmo Energy, GS Caltex and SK Energy. A rising rig count denotes higher production in the future.

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