Oil Markets Subdued

Oil market trading was cautious on Wednesday, with crude demand and shipments subdued due to refinery closures following Hurricane Harvey and the arrival of an even bigger hurricane in the Caribbean.

In international oil markets, Brent crude futures dipped 8 cents to $53.20 a barrel. US West Texas Intermediate crude futures were at $48.69 barrel, little changed from their last settlement, CNBC reported.

Although many refineries, pipelines and ports that were knocked out by Harvey 10 days ago are now restarting, analysts said it would take weeks before the US petroleum industry is back to capacity.  As of Tuesday, about 3.8 million barrels of daily refining capacity, or about 20%, was shut. Several other refineries were running at reduced rates, according to company reports and Reuters' estimates.

Focus was also being drawn to massive Category 5 storm Hurricane Irma, which is barreling toward the Caribbean and Florida, and could knock out other refineries.

Fuel storage data due for release later on Wednesday by the American Petroleum Institute and on Thursday by the Energy Information Administration is expected to give a better view of the extent of Harvey’s impact on US fuel inventories, although analysts said it will take a few weeks longer to get a complete picture.

“With another hurricane threatening to hit the US coast, traders still remain cautious,” ANZ bank said on Wednesday.

Around 250,000 barrels of daily refining capacity in the Dominican Republic and Cuba lie in the immediate path of Irma, Thomson Reuters Eikon data showed, with several tankers seen on satellite images changing their routes to avoid the storm.

“Maximum sustained winds are near 295 km/h with higher gusts. Irma is an extremely dangerous Category 5 hurricane ... Irma is forecast to remain a powerful Category 4 or 5 hurricane during the next couple of days,” said the US National Hurricane Center.

There is also another tropical storm on Irma’s heels in the Atlantic, and another one active in the Gulf of Mexico.  Longer-term, the global oil industry outlook is for ample supplies and low prices, as crude output remains high among the three biggest producing regions: Russia, the Middle East and North America.