Oil rises on stronger demand, supply restrictions

Oil prices rise for 3rd straight session as IEA reports drop in global supply

Barkindo said the drop in global oil prices was the sharpest ever experienced.

And while Brent's significant premium over the US benchmark informs analysts that the USA crude market needs more time to return to normal in the wake of Hurricane Harvey, they were mainly buoyed by news from the International Energy Agency that global oil demand is set to accelerate faster than anticipated this year.

Its next meeting will be on September 23, said Al-Marzouq who indicated that the committee will discuss reports and recommendations regarding the global prices during the event.

Oil consumption will increase in 2017 by an upwardly revised 1.6m barrels a day to 97.7m b/d, the energy body said its closely-watched monthly oil market report published on Wednesday.

Overall, there were solid gains later in the NY session with an initial move to the $49.0 p/b level. Over the last month, crude oil imports averaged about 7.6 million barrels per day, 7.4% below the same month past year.

On the other hand, the U.S. West Texas Intermediate or WTI CLc1 was also dragged down by the huge Hurricane pressure and was losing as much as 30 cents at $47.77 per barrel; while the largest local U.S. refinery, Motiva Port Arthur extends shut down after recuperating from the mass effect of Hurricane Harvey and now Irma.

"The market is reacting in anticipation of refineries restarting at the same time expecting a decline in demand due to the after effects of Hurricanes Harvey and Irma", said Andrew Lipow of Lipow Oil Associates in Houston.

The numbers show that "Hurricane Harvey's disruptive influence continues", said Smith, director of commodity research at ClipperData. Distillate stocks fell 3.2 million barrels.

Oil prices were subjected to choppy trading following the latest EIA inventories release with the larger than expected increase in oil inventories offset by a record decline in gasoline stocks.

Global oil supply meanwhile fell in August by 720,000 b/d on unplanned outages and scheduled maintenance, mainly from countries outside of the Opec cartel, the IEA said.

"As far as Harvey is concerned, disruption to local oil markets in the US Gulf Coast is easing on a daily basis and its impact on global markets is likely to be relatively short-lived", said the agency, which advises the OECD on energy markets. The IEA said it is time to reexamine the region's energy security with the United States adding refined products to the country's strategic petroleum reserves alongside crude.

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