Speculators raise USA crude oil net longs in wake of Harvey-CFTC

The differential "can be explained in part by lower demand for US crude oil in the next few weeks, as some refineries on the [Gulf Coast] will remain closed.while demand is also likely to suffer as a result of the devastation caused by Hurricane Irma in Florida", according to analysts at Commerzbank.

The hurricanes have rattled energy markets, with Irma shutting Florida fuel stations and ports and Harvey earlier halting about one-quarter of the nation's refining capacity.

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

"Harvey's negative impact on demand will remain larger, however, given the large concentration of energy-intensive petrochemical activity in its path", the bank said.

Japan is Saudi Arabia's biggest market for crude, but oil stored at the site in Okinawa has also been supplied to South Korea and China among others.

The deal aims to curb a glut that has weighed on crude prices for more than three years.

Despite the agreement, the oil price (WTI) has suffered a major selloff on the day of the agreement extension and was down around 3 percent by the end of the day.

Saudi Arabia will supply full contracted volumes of crude oil to at least five north Asian term buyers in October, while a sixth regional refiner was notified of cuts to its October Arab Extra Light supplies, sources familiar with the matter said on Monday. Analysts at consultancy JBC Energy said those talks should prove supportive for crude prices.

Members of the Organization of Petroleum Exporting Countries and other producers including Russian Federation have pledged to reduce crude output by about 1.8 million barrels a day through March to trim global oil inventories and buttress prices. The goal of the deal, which was extended in May, was meant to drain a global oversupply that has kept prices depressed amid a resurgence in USA shale production.

Both U.S. product futures ended lower - gasoline dropped 0.7 percent and heating oil fell 1.4 percent.

Investors and analysts were also looking ahead to monthly reports from OPEC and the International Energy Agency later this week.

Elsewhere, declined 0.4 cents, or 0.3%, to $1.632 a gallon, while added 1.2 cents, or 0.4%, to $2.962 per million British thermal units.

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