Oil Update: Oil edges up as Saudi Arabia looks to extend cuts

The oil markets reacted positively to Saudi Arabia's talks of extending supply cuts in the coming months. The Saudi Arabian Oil Minister discussed a possible extension of cuts with his Venezuelan and Kazakh counterparts. News of the extension talks held off decline in oil-prices brewing from the Hurricane Irma aftermath. Saudi Arabia Minister agreed with his Kazakh counterpart of extending the rebalancing effort would be considered in due course.

The Saudi extension news balanced qualms about the Hurricane Irma hitting Floridian coast. Oil investors feared that the Hurricane would shoot up the demand and thereby increase the price of crude in the international markets as a reaction. The power was knocked off to more than 4 million homes in state of Florida as a result of devastating storm. However, the hurricane has been downgraded to a Tropical storm over northern Florida or southern Georgia later on Monday.

U.S. crude for October delivery was up 39 cents, or 0.8 percent, at $47.87 a barrel by 0409 GMT, having tumbled 3.3 percent on Friday.

London Brent crude for November delivery was up 22 cents, or 0.4 percent, at $54, having settled down 1.3 percent.

Hurricane Harvey, which hit Texan state during last two weeks, pulled the refinery output in US to its seven year low. The damage, however, was primarily to the refineries sparing oil and petrochemical plants along the US Gulf Coast. Refineries are resuming their operations as the storm subsides.

On the Persian coast, Iran is expected to reach an oil production rate of 4.5 million barrels per day within five years, Iranian officials said in a statement. Iran is currently producing 3.8 million bpd during the recent months.