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Goldman Sachs: Irma and Harvey to hit oil demand

Oil demand is likely to fall by about 900,000 barrels per day (bpd) in September due to the combined impact of hurricanes Harvey and Irma, Goldman Sachs said on Monday.

“Irma will have a negative impact on oil demand but not on oil production or processing. Harvey’s negative impact on demand will remain larger, however, given the large concentration of energy-intensive petrochemical activity in its path,” analysts at the bank said in a note.

Goldman estimates that with disruptions in production and demand factored in, the hurricanes alone will add 600,000 bpd to global oil inventories in September.

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Hurricane Harvey hit the United States two weeks ago, shutting roughly a quarter of its refinery capacity, while Irma took aim at heavily-populated areas of central Florida after making landfall on Sunday.

The storms are likely to reduce demand by about 300,000 bpd in October according to rough estimates, the bank said.

Gasoline would bear the brunt of the impact on demand and that would be in addition to the 150,000 bpd decline in September due to seasonal factors, the bank said.

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