Oil Prices Drop On Demand Worries After US Hurricanes

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

Saudi Arabia and Venezuela, both members of OPEC, agreed to consider prolonging production cuts "beyond the first quarter of 2018, if needed", the Saudi ministry said in one of the statements.

The market was assessing Irma's effect on demand, even as refinery restarts in the wake of Hurricane Harvey boosted expectations for crude oil consumption.

USA crude futures rose 17 cents, or 0.35%, to $48.24 a barrel on the New York Mercantile Exchange.

Oil prices headed higher Tuesday, stretching gains in to a second-consecutive session as the latest OPEC report that showed oil production from the cartel fell last month.

Brent crude LCOc1 settled up 43 cents or 0.8 percent to $54.27 per barrel.

The new deal may include OPEC members Libya and Nigeria, which are exempt from the current agreement. More recently Hurricane Irma left more than seven million homes without electricity in Florida.

Oil prices were mixed on Monday, with Hurricane Irma's continued pounding Florida raising demand fears, while USA refinery restarts and Saudi cut extension talks gave upward pressure.

More news: After the winds die, a massive recovery effort in Florida

Oil prices rose on Monday as key USA refineries began restarts following Hurricane Harvey, which may help revive crude oil processing, while fuel prices fell as Hurricane Irma is likely to clip demand for gasoline and diesel.

Hurricane Harvey disrupted refinery production in Texas last month-one reason US crude futures have been lower than the global benchmark.

Crude prices are down 8.6% in the a year ago.

On average, analysts polled by S&P Global Platts expect the EIA to report a climb of 10.1 million barrels in crude supplies, along with declines in gasoline stocks of 4 million and distillate stocks of 300,000 barrels.

"The oil market reacted to the Saudi talks", said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting told Reuters. Net, we project a larger - in fact record large - crude inventory build but smaller product draws in the coming week than previously.

The latest inventories data will come back into focus with the API data due for release after Tuesday's NY close with the latest EIA data on Wednesday.

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