Oil prices settled higher on Monday, as refineries planned restarts and Saudi Arabia debated the possibility of extending a deal to curb output among major producers.
Light, sweet crude for October delivery settled up 59 cents, or 1.2%, at $48.07 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 6 cents, or 0.1%, to $53.84 a barrel.
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Hurricanes Harvey and Irma have spurred volatile trading in energy markets in the past few weeks, as traders assess how the damage across major cities will impact demand for oil. When Harvey made landfall at the end of August, the wind and rain knocked out more than 20% of the country's refining capacity.
However, prices began to recover as several refiners affected by the storm announced plans to restart operations.
"Some pretty material chunks have started coming back," said John Saucer, vice president of research and analysis at Mobius Risk Group. "Obviously, the problem is not over, but it's diminishing."
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 expiration date.
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.
Some worries over the fallout from Irma also eased on Monday, after it was downgraded to a tropical storm. Analysts had forecast that Irma could exacerbate a drop in crude consumption, as flooding and outages negate the need for fuel. U.S. oil futures traded as low as $47 a barrel on Monday, before reversing losses.
"Irma has been an event that's just going to crush demand," said Ric Navy, senior vice president for energy futures at RJ O'Brien & Associates LLC. "There's nothing bullish about it. To me, it's just a matter of how bearish it is."
In a Monday note, Goldman Sachs analysts predicted that the combined demand loss from the hurricanes would total about 900,000 barrels a day in September, and 300,000 barrels a day in October, a "bearish shock for global oil balances." This should also lead to an increase of the amount of crude oil in storage, market analysts said.
Gasoline futures fell 0.8% to $1.6345 a gallon, and diesel futures slid 1.3% to $1.7427 a gallon.
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(END) Dow Jones Newswires
September 11, 2017 16:58 ET (20:58 GMT)