Investing.com – Oil prices settled lower on Friday as U.S. refineries continued to recover at a slow pace in the wake of flooding due to Storm Harvey which kept demand for crude oil subdued.
On the New York Mercantile Exchange crude futures for October delivery fell more than 3% to settle at $47.48 a barrel, while on London's Intercontinental Exchange, Brent lost 1.34% to trade at $53.76 a barrel.
Two weeks after Storm Harvey made landfall on the Texas coast, knocking out a quarter of U.S. oil refining capacity, oil prices continued to come under pressure as refineries have been slow to restart, weighing on demand for crude oil, the primary input at refineries.
Analysts said, however, that the slowdown in refining and output should be temporary.
"Most refineries are restarting and we expect a near-full recovery by month-end," U.S. investment bank Jefferies said.
Falling crude prices have weighed on U.S. drilling activity over recent weeks, as data showed the number of U.S. oil rigs fell from the prior week.
Oilfield services firm Baker Hughes said its weekly count of oil rigs operating in the United States declined by 3 to 756.
The weekly rig count is an important barometer for the drilling industry and serves as a proxy for oil production and oil services demand.
The dip in crude demand was reflected in a report from the Energy Information Administration (EIA) on Thursday showing crude stockpiles rose for the first time in ten weeks.
Inventories of U.S. crude rose by roughly 4.6m barrels in the week ended Sept. 1, missing expectations of a rise of about only 4m barrels.
Meanwhile, investors continued to monitor the impact of Hurricane Irma on oil demand. Irma is expected to reach Florida by Saturday.