Oil Jumps After US Gasoline Stockpiles Plunge to 22-Month Low

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Despite that advance, Wednesday was the first settlement above the key psychological barrier of $US50 since July 31 as booming output from American shale fields countered output cuts by the Organization of Petroleum Exporting Countries and its allies.

"While demand seasonality in the summer worked to reinforce the impact of supply restraint by producers, the autumn will work against OPEC's efforts as oil product demand and refinery crude throughputs decline".

Georgi Slavov, the head of research at commodities brokerage Marex Spectron, said he did not expect demand for crude oil to rise significantly in the final quarter of this year, which meant supply would have to be restricted even more tightly.

Oil prices dipped early on Monday but remained near multi-month highs reached late last week as the count of US rigs drilling for new production fell and refineries continued to start up after having been knocked out by Hurricane Harvey.

Oil prices have witnessed sharp rise after Iraq indicated that OPEC is considering an extension of the supply cut deal to eliminate the global oversupply.

Commercial crude inventories rose to 472.8 million barrels, up from 457.8 million barrels the week before Hurricane Harvey slammed into the Gulf Coast and knocked out more than a dozen major refineries, the Energy Department reported Wednesday. Earlier this week, Iraqi Oil Minister Jabbar al-Luaibi said he and ministers from other oil-producing nations think production should be reduced by an additional one per cent.

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Crude stocks at the Cushing, Oklahoma, delivery hub rose by 703,000 barrels, EIA said.

November Brent crude LCOX7, +1.07% the global benchmark, rose 49 cents, or 0.9%, to$55.63 a barrel on the ICE Futures Europe exchange. The global benchmark crude traded at a premium of $5.32 to November WTI.

Although the front-month gasoline futures contract that expires next week was little changed at $1.6498 a gallon, later-dated contracts including the more-heavily traded November futures rose.

Inventories of diesel and other distillates slid to the lowest level since 2011 while exporters shipped 5.42 million barrels of oil and fuels amid the recovery from Hurricane Harvey, the report showed.

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