Oil prices rise as Opec cuts production

Monday's gains came as Hurricane Irma struck the USA southeast with less force than once feared, easing worries that energy demand would be hit hard. By Monday morning, it had weakened to a tropical storm, heading towards Georgia.

West Texas Intermediate for October delivery was at $48.01 a barrel on the New York Mercantile Exchange, down 6 cents, at 1 p.m.in Hong Kong.

Spot gold is down 0.8 per cent at $1,335.10 an ounce while United States gold futures for December delivery is down 0.9 per cent at $1,339.40 an ounce.

The longer-term focus, however, was on a possible extension to the 15-month production pact between members of the Organization of the Petroleum Exporting Countries and non-OPEC producers including Russian Federation.

Both U.S. product futures ended lower - gasoline dropped 0.7 percent and heating oil fell 1.4 percent.

Meanwhile, monthly reports from the Opec and International Every Agency due Tuesday and Wednesday, respectively, are expected to provide market participants with an update on Opec production and global demand forecasts.

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OPEC's crude oil production declined in August thanks to Saudi Arabia cutting more from its production, a person familiar with the figures told Bloomberg, adding the information came from four of six secondary sources that track the production rates of the cartel's members.

Goldman Sachs is tentatively estimating Harvey's impact on demand at about 600,000 barrels a day in the month following landfall, while the firm sees Irma's initial impact at around 300,000 barrels a day.

Aside from total USA crude stockpiles, oil centered in the Cushing, Oklahoma hub, which stores supply meant for delivery against WTI contracts, has abeen rising.

The hurricanes have rattled energy markets, with Irma shutting Florida fuel stations and ports and Harvey earlier halting about one-quarter of the nation's refining capacity.

Saudi Arabia, Opec's de facto leader and the world's largest exporter, said Sunday that the country's energy minister Khalid al-Falih met with his Venezuelan and Kazakh counterparts to discuss an extension of Opec's supply-cut agreement.

OPEC and other major oil producers such as Russia, Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Sudan, and South Sudan reached an agreement in December 2016 to remove 1.8 million barrels a day from the market.

  • Sonia Alvarado