23 September, 2017
Oil rallied earlier in the day after Iraq, the second largest producer in the Organization of the Petroleum Exporting Countries, said it had limited its output by around 260,000 barrels per day (bpd), exceeding the 210,000-bpd agreed under OPEC production cuts. The recovery in USA refinery demand after Hurricane Harvey and optimism around tightening global crude oil supply and demand also helped oil prices.
In the previous week, crude stocks climbed 5.9 million barrels, but gasoline inventories plunged by 8.4 million barrels.
Oil prices settled almost flat on Thursday, the eve of a meeting of major oil-producing countries in Vienna to discuss whether they will extend production limits that have helped reduce the global crude glut.
Market participants initially shrugged off Wednesday's report by the U.S. Energy Information Administration showing that crude stockpiles rose more than expected last week.
In the USA, an Energy Information Administration report Wednesday showed crude inventories expanded by 4.59 MMbbl last week, while both gasoline and distillate stockpiles tumbled.
US West Texas Intermediate (WTI) crude futures were up 33 cents, or 0,6%, at US$49,78 a barrel at 06h44 GMT.More news: Jitters in Europe as Russia-Belarus war games set to begin
The EIA also said total domestic crude oil output rose by 157,000 barrels a day to 9.510 million barrels a day.
Elsewhere, Brent oil for November delivery on the ICE Futures Exchange in London was up 19 cents or about 0.34% at $56.10 a barrel, after hitting a fresh five-month high of $56.30 overnight. A 5.69 million barrel drop in distillate supplies, the biggest drop since 2011, was a major concern as fall grain harvest and winter is just around the corner. All told, total USA petroleum stocks fell by 6.6 million barrels.
The deal has been in effect since January, but has been blighted by rising production from exempted OPEC members Libya and Nigeria, non-compliance by other countries and rising United States output.
Benign inventory growth in US crude stocks last week - despite larger builds feared initially from refinery closures related to Hurricane Harvey - helped limit the downside in oil. The deal was extended in May through March 2018, but has been hindered by both a lack of compliance by some signatories and steady USA shale output.
Rounding out action on Nymex, October natural gas traded at $3.126 per million British thermal units, up less than a half cent.