Investing.com – Crude futures settled lower for the second day in a row, as investor concerns grew over a fall in demand for U.S. oil, after Hurricane Harvey tore through Texas, shutting down more than 16% of overall U.S. capacity.
On the New York Mercantile Exchange crude futures for October delivery fell 13 cents to settle at $46.44 a barrel, while on London's Intercontinental Exchange, Brent lost 11 cents to trade at $51.31 a barrel.
Crude oil’s poor start to the week continued, as Hurricane Harvey wreaked havoc in Texas, ripping through the heart of the U.S. oil industry, knocking out several refiners in the region, weighing on refining capacity.
About 3 million bpd of U.S. refining capacity had already been shut, with more shutdowns expected, sparking concerns over an excess in crude oil supplies, the primary input at refiners.
U.S. crude production also came under pressure due to Harvey, however, analysts believe the impact of lower crude demand at refineries would outweigh the dip in crude oil production.
“While production of crude oil has been hampered by the storm, the refinery shut-ins have crimped demand for oil,” said Nitesh Shah, director and commodities strategist at ETF Securities.
Crude futures, however, attempted to pare gains later in the session as traders looked ahead to to bullish U.S. crude inventory data from the American Petroleum Institute on Tuesday as well as a further report from EIA on Wednesday.
Analysts forecast crude inventories fell by 1.9m barrels in the week ended Aug 25, the ninth-straight week of declines.