Saudi Arabia open to another OPEC cuts extension

"At this point, there is an expected hit to gasoline demand from Hurricane Irma in Florida, but we are hearing that the infrastructure isn't as bad off as feared", said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, in a telephone interview.

Hurricane Irma, which has been moving inland over the southeastern parts of the USA, has affected at least nine states so far, among them Florida, Georgia, Alabama and SC, causing storm surges and flooding and cutting off power supplies. It gradually lost strength and weakened to a tropical storm by Monday morning as it headed towards Georgia.

Brent crude oil futures for November delivery LCOc1 were down 66 cents at $53.12 a barrel while benchmark U.S. West Texas Intermediate crude CLc1 declined by 33 cents to $47.15.

The price for Brent crude oil was up 0.46 percent at 9:18 a.m. EDT to $54.13 per barrel.

While it's unclear what positive effect if any a three month extension would have on the market, the prospect of prolonged cuts was once more spoiled by familiar news from Iran: Ali Kardor, the managing director of the National Iranian Oil Company (NIOC), announced that the Islamic republic will reach an oil production rate of 4.5 million barrels per day (bpd) within five years, compared to the 3.8 million bpd it has been pumping of late.

USA crude stockpiles likely rose by 4.82 million barrels last week, according to a Bloomberg survey ahead of Energy Information Administration data released Wednesday.

The initial OPEC-non-OPEC agreement pushed Brent prices up to nearly US$57 a barrel and WTI to over US$54 a barrel in January this year, but since then, the benchmarks have been sliding down, with a few notable interruptions of the trend thanks to supply disruptions and the May decision to extend the cuts beyond the original deadline of June 30, 2017.

Warner, Handscomb tame Tigers in Chittagong
Mushfiqur took a spectacular diving catch to dismiss Matt Renshaw for four but Warner and Smith batted sensibly to reduce the gap. Handscomb had already backed up too far, however, and was run out at the bowler's end thanks to a direct hit.

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Just ahead of the USA open, there were reports that OPEC would consider extending production curbs for more than 3 months which pushed WTI to just above $48.0 p/b while Brent traded just above $54.0 p/b.

A Reuters poll of six analysts taken ahead of inventory reports forecast that crude stocks likely rose by 2.3 million barrels in the week ended September 8.

Meanwhile, U.S. President Donald Trump said North Korea would regret escalating recent nuclear tensions, but added that a military option wasn't inevitable.

The latest inventories data will come back into focus with the API data due for release after Tuesday's NY close with the latest EIA data on Wednesday.

Non-Opec Kazakhstan is aiming for a stand-alone deal with Opec on restraining its crude production due to a need to crank up output at its Kashagan field, a Kazakh official said last week.

But with stocks still stubbornly high and non-OPEC production growth showing no signs of abating - according to the IEA, non-OPEC output is expected to grow by 1.4 million b/d in 2018 and that could wipe out gains from a growth in demand - it remains to be seen if simply an extension will be enough or will the producer group have to deepen the production cuts to speed up rebalancing.

Both ministers agreed that the extension of the Vienna agreement on output cuts after March 31, 2018, would be discussed at the right time, as per the needs of the market fundamentals.


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