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

Reuters

"If OPEC is really still willing to commit to extending production cuts, that gives this market some room to test the upside here".

Brent crude futures rose $1.06, or 1.9 percent, to $56.20 a barrel by 12:19 p.m. EDT (1619 GMT), while U.S. West Texas Intermediate (WTI) crude futures gained 91 cents, or 1.8 percent, to $50.39.

Meanwhile, the American Petroleum Institute, an industry group, reportedly said Tuesday that US crude inventories had risen by 1.4 million barrels in the week ended September 15.

While oil has rebounded the past two weeks, crude in the US has struggled to hold above $50 a barrel as prices beyond that level make some shale profitable and boost supply.

"OPEC and other participating countries in the deal are planning to extend the oil curb beyond March next year, when the agreement is scheduled to end".

Prices were supported after the American Petroleum Institute said on Tuesday that USA crude stocks rose last week, while gasoline and distillate stocks decreased. Total volume traded was about 2 per cent above the 100-day average.

United States crude stockpiles rose to 472.8 million barrels last week, while inventories at the crucial trading hub in Cushing, Oklahoma, climbed to the highest since June and crude production increased for a second straight week. West Texas Intermediate (WTI) crude futures settled up 2 cents at $49.91, close to Thursday's near-four month high of $50.50."They're still working out the aftermath of the hurricanes", said John Kilduff, a partner at Again Capital Management in NY.

Brent for November settlement advanced $1.03 to $56.17 a barrel on the London-based ICE Futures Europe exchange.

Global crude oil prices slipped slightly Monday but stayed close to multimonth highs as traders braced for a potential stockpile build, expected later this week.

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.

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.

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