Oil prices oscillated Monday morning, with U.S. crude recovering a fraction of its losses from the last session and Brent trending downwards.
Brent crude, the global benchmark, was down 0.3%, at $53.61 a barrel in London midmorning trading. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up around 0.6%, at $47.78 a barrel.
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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 impact of Hurricane Irma, which made landfall in the U.S. over the weekend.
In a "dramatic situation" like a hurricane, there is going to be "a lot of volatility in the numbers," Mr. Tchilinguirian said. He noted that the impact of Harvey on U.S. crude demand was "not as weak as initially anticipated," which was providing a slight boost to WTI.
U.S. crude had declined by roughly 3% on Friday, further widening the spread with Brent to over $6.
The differential "can be explained in part by lower demand for U.S. 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.
Brent had risen to a five-month high last week before giving up some of those gains by the end of the day Friday. Analysts widely expect the price gap between Brent and WTI to narrow in the coming days and weeks.
Meanwhile, Saudi Arabia--the world's largest exporter of crude oil--said Sunday that the country's energy minister and his Venezuelan counterpart had discussed the possibility of extending OPEC's oil output cut deal beyond the March 2018 expiration date. Analysts at consultancy JBC Energy said those talks should prove supportive for crude prices.
The Organization of the Petroleum Exporting Countries, of which Saudi Arabia is the largest member, and 10 other producers including Russia first agreed late last year to cap their production at around 1.8 million barrels a day lower than October 2016 levels. 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 U.S. shale production.
Investors and analysts were also looking ahead to monthly reports from OPEC and the International Energy Agency later this week.
Among refined products, Nymex reformulated gasoline blendstock--the benchmark gasoline contract--was down 0.8%, at $1.65 a gallon. ICE gasoil, a benchmark for diesel fuel, changed hands at $418.25 a metric ton, down more than 1% from the previous settlement.
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(END) Dow Jones Newswires
September 11, 2017 06:48 ET (10:48 GMT)