Crude Oil Prices Continue To Monitor Hurricane Harvey, Buying On Dips

Main attention will be on hurricane Harvey and the impact on US installations, although there is scope for significant buying on dips given confidence in fundamentals.

Oil prices came under heavy selling pressure in US trading on Thursday with a slide in WTI to lows below $47.20 p/b.

There was underlying uncertainty surrounding Hurricane Harvey with some concerns that any shutdowns and damage to refineries would undermine crude demand and put downward pressure on prices.

There was a recovery back to the $47.70 p/b late in the US session with a lack of liquidity contributing to choppy trading conditions.

There were comments from the OPEC ministerial committee that an extension of production cuts could be extended for a further 3 months.

Hurricane Harvey was still the main focus with expectations that it could become at least a category 3 storm and the strongest hurricane to hit the US mainland in over 10 years.

There was a more hawkish assessment of the potential impact, especially if there is any damage to shale output potential.

The gains in gasoline prices also underpinned crude prices ahead of the US open.

Overall, WTI consolidated around $47.70 p/b ahead of the US open with Brent trading around $52.40 p/b.

The latest Baker Hughes data will be watched after the European close and positioning data will also be an important element late in the US session.