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Oil markets dip on fallout from Hurricane Harvey; Irma also in focus
[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 Five 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 and Reuters estimates.
US West Texas Intermediate (WTI) crude futures were at US$48.63 barrel at 0048 GMT, three cents below their last settlement.
In international oil markets, Brent crude futures dipped 19 cents to US$53.19 a barrel.
Meanwhile, Hurricane Irma is heading for the Caribbean islands of Antigua, Barbuda, Anguilla, Montserrat, St Kitts and Nevis, the Virgin Islands, Puerto Rico, the Dominican Republic, and parts of Cuba.
"With another hurricane threatening to hit the US coast, traders still remain cautious," ANZ bank said on Wednesday.
"Maximum sustained winds are near 295 km/h with higher gusts. Irma is an extremely dangerous Category Five hurricane... Irma is forecast to remain a powerful Category Four or Five hurricane during the next couple of days," the US National Hurricane Center (NHC) said.
There is another tropical storm on Irma's heels in the Atlantic, and another one active in the Gulf of Mexico.