Oil prices dip on fallout from Hurricane Harvey

SINGAPORE: Oil prices dipped on Wednesday as crude demand remained subdued on the back of refinery closures following Hurricane Harvey which hit the US Gulf Coast 10 days ago.

Market focus was also being drawn to Hurricane Irma, a record Category 5 storm, which is barrelling towards important shipping lanes in the Caribbean.

Although many refineries and pipelines which were knocked out by Harvey are now in the process of restarting, analysts say it will take some time before the US petroleum industry is back to full crude processing capacity.

As of Tuesday, about 3.8 million barrels of daily refining capacity, or about 20 per cent, was shut, though a number of the refineries in that group were in the process of restarting.

Several others, including Marathon’s Galveston Bay and Citgo’s Corpus Christi refineries, were running at reduced rates, according to company reports.

US West Texas Intermediate (WTI) crude futures were at $48.63 barrel at 0048 GMT.

In international oil markets, Brent crude futures dipped 19 cents to $53.19 a barrel.

Meanwhile, Hurricane Irma is heading for the Caribbean islands of Antigua, Barbuda, Anguilla, Montserrat, St Kitts and Nevis, Virgin Islands, Puerto Rico, Dominican Republic and Cuba.

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

“Maximum sustained winds are near 185 mph with higher gusts. Irma is an extremely dangerous Category 5 hurricane,” the US National Hurricane Centre said.