U.S. refinery activity plummets as Harvey hits Gulf Coast, DoE says

Oil Prices Steady Amid Rising Crude Inventories

Oil prices rise amid sharp decline in US output

Brent crude futures rose to $54.57 a barrel at 0735 GMT, with the benchmark for global oil prices earlier marking its highest since April at $54.79 a barrel. "The impact of the forces of nature on US oil production should not be overestimated-nor should their impact on demand be underestimated".

Data from the U.S. Energy Information Administration Thursday showed that domestic crude supplies climbed by 4.6 million barrels for the week ended September 1.

The EIA reported that refinery runs last week averaged 14.5 million barrels of crude, a decline from 17.7 million bpd the week before, when the authority also reported a 5.4-million-barrel draw in crude oil inventories.

Its predecessor, Harvey, shut a quarter of US refineries and 8% of USA oil production.

That US crude oil inventories would increase in the wake of Hurricane Harvey was largely anticipated, with some saying as much as 40-60 million barrels could be added to inventory while shuttered refineries struggle to come back online.

But the slowdown in refining and output should be temporary.

It knocked out nearly a quarter of the country's huge refinery industry, cutting demand for crude oil refining lifeblood.

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"Irma looks like it will miss the key Gulf areas, and we're more anxious about shale", said Mark Watkins, regional investment manager at U.S. Bank.

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

Traders are saying it may take weeks for the US petroleum industry to return to full capacity, ant that under the current conditions it was hard to identify fundamental market trends.

Crude oil prices are little changed early Friday as the market continues to be controlled by the potential impact of hurricane Irma on the Caribbean and Florida and last week's damage to the Texas Gulf Coast oil industry by Hurricane Harvey.

"Imports (of oil) to the U.S. Gulf Coast fell to levels not seen since the 1990s", ANZ said.

Hurricane Irma, which has become one of the biggest storms ever measured, on Friday hit the Dominican Republic and Haiti, heading for Cuba and the Bahamas. It was predicted to hit Florida on Sunday or Monday.

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