Oil Turns Higher After OPEC Reports Output Turned Lower

6 2017 shows the Hotel Mercure in Marigot near the Bay of Nettle on the French Collectivity of Saint Martin during the passage of Hurricane Irma

US Hurricanes Affecting Oil Prices, Saudi Could Cut Output

Saudi Arabia's Energy Minister Khalid al-Falih met his Venezuelan and Kazakh counterparts at the weekend to discuss an extension of the deal by at least three months, the Saudi energy ministry said.

The Organization of the Petroleum Exporting Countries (OPEC), of which Saudi Arabia is the de facto leader, and other producers including Russian Federation, have agreed to curb their output by around 1.8 million barrels per day until next March.

In a note Monday, however, analysts at Goldman Sachs said the negative impact on oil demand from Irma will be smaller than Harvey, which made landfall on the Texas coast on August 25.

OPEC's oil output dipped in August, the organization said Tuesday, a sign that supply and demand could be moving further towards balance. A separate report showed that USA oil production dropped sharply to 8.78 million barrels per day due to hurricane effect.

Hurricane Irma knocked out power to over 7.3 million in Florida, Georgia, South Carolina and Alabama, according to state officials and utilities on Monday. The deal, reached in late 2016, initially called for a six month period, which later was extended with another nine months until the end of March 2018.

Crude prices are down 8.6% in the past year.

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The extension talk aided sentiment, with the downgrade of the hurricane welcomed.

At the same time, prices have stubbornly stayed around US$50 a barrel after the initial spike, in large part thanks to growing output from the two exempted OPEC members, Nigeria and Libya.

OPEC and other producers, including Russian Federation, have agreed to reduce output by about 1.8 million barrels per day until next March in a bid to reduce global oil inventories and support oil prices.

"We're waiting for our refineries to all get going", he said, "On the east coast we don't have enough gasoline so we have to import more product from Europe, which adds a boost to Brent".

Recently OPEC said it was open to extending its effort to reduce the global petroleum glut by withholding supplies beyond March of next year.

The API is due to release its data for last week at 4:30 p.m. EDT (2030 GMT) on Tuesday and the EIA report is scheduled at 10:30 a.m. EDT on Wednesday.

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