Oil prices rise amid sharp decline in U.S. output

Brent daily chart

Brent daily chart

Gulf Coast imports dropped by 41% last week to 1.48 million barrels a day, the lowest volume since at least January 1990, according to a report from the Energy Information Administration on Thursday. That has raised concerns about demand, as storms tend to cut down on driving, particularly as many cars have been destroyed.

Oil markets were mixed on Friday, with Brent crude supported by expectations that Saudi Arabia could cut its October supplies, while U.S. crude was weighed down by refinery outages due to damage from Hurricane Harvey, which dented demand.

Brent crude oil futures for November delivery were up 5 cents at $53.73 a barrel, while benchmark US West Texas Intermediate crude advanced by 32 cents to $47.80.

US crude fell due to low refining activity following Harvey, which sharply reduced demand for crude oil, traders said.

Brent crude futures were up 8 cents at $54.57 a barrel at 7:30AM GMT, with the benchmark for global oil prices earlier marking its highest since April at $54.79 a barrel.

In a note Monday, however, analysts at Goldman Sachs said the negative impact on oil demand from Irma will be smaller than Harvey, which made landfall on the Texas coast on August 25.

"Hurricanes can have a lasting effect on refinery and industry demand", said Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt.

Harvey's impact was also felt in oil production.

Harry Tchilinguirian, global head of commodity markets at BNP Paribas, said the market was still determining the extent of the damage of Hurricane Harvey on oil refineries, while anticipating the effect of Hurricane Irma, which made landfall in the US over the weekend.

Bloomberg news agency reported that as of September 8, only 8 percent of the oil refining capacity remained withdrawn after the Hurricane Harvey.

Port and refinery closures along the Gulf coast and harsh sea conditions in the Caribbean have also impacted shipping.

After cutting seven rigs in August, the first monthly reduction since May 2016, drillers cut three oil rigs in the week to September 8, bringing the total count down to 756, energy services firm Baker Hughes energy services firm said.

Futures were little changed in NY, up 3.7% for the week.

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