Brent is hovering above $55 on the prospect of stronger demand

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

Interruptions from Hurricane Harvey, dwindling OPEC production and seasonal maintenance caused output to come down by 720,000 barrels a day last month from July, to 97.7 million barrels a day, the International Energy Agency said Wednesday.

Oil demand for 2017 will expand by the most in two years, the Paris-based IEA said on Wednesday.

Markets will be influenced later in the day when the U.S. Energy Information Administration releases its short-term market report, which includes forecasts for crude oil prices.

Gasoline stockpiles were down 8.4 million barrels for the week, the EIA said.

In August, OPEC's total crude oil production eased by 79,000 b/d, to average nearly 32.8 million b/d.

IEA expects that world demand for oil in 2017 will increase by 1.6 million barrels per day year-on-year, Russian news agency Tass reported, citing the agency's September report.


For the first time in five months, the OPEC output fell, after disorder in Libya mess up flows and other member countries decrease production. Crude stockpiles rose by 5.9 million barrels during the same week, a result of lagging demand from recovering refineries in the wake of Harvey.

OPEC recently increased its projected demand for Europe and China while IEA increased projections for oil consumption globally, according to Jon Rigby, an analyst at UBS. "Undoubtedly this boost in demand will contribute to further reductions in commercial oil inventories", he said.

Hurricanes Harvey and Irma's effect on the US oil industry is apparent within weekly data from the Energy Information Administration, which shows huge changes from inventories to refinery operations to exports.

Should OPEC keep pumping at August's rate, the market would see a small supply deficit next year, versus a 450,000-bpd surplus implied by last month's report.

Global oil supplies have hit a snag in recent weeks as Hurricane Harvey limited output in the USA and declining activity in the Middle East helped the Organization of Petroleum Exporting Countries keep to a previous deal to limit production. Gold is 0.1 per cent lower at 1,320.40/troy ounce.

The report also said OPEC's output in August declined by 79,000 bpd from July to 32.76 million bpd, citing figures from secondary sources such as consultants and oil-industry media.

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