Oil rises as IEA sees higher oil consumption

Record Gasoline Withdrawals Support Rebound in Oil Energy ETFs

The West Texas Intermediate for October delivery was up 1.07 USA dollars to settle at 49.30 dollars a barrel on the New York Mercantile Exchange, while Brent crude for November delivery rose 0.89 dollar to close at 55.16 dollars a barrel on the London ICE Futures Exchange.

Brent for November settlement slid 27 cents to $53.57 a barrel on the London-based ICE Futures Europe exchange after gaining 6 cents on Monday.

"OECD demand growth continues to be stronger than expected, particularly in Europe and the United States", the Paris-based IEA said. Crude inventories rose by 6.2 million barrels in the week to September 8 to 468.8 million, compared with analysts' expectations for an increase of 3.2 million barrels. That's below the forecast for a rise of 10.1 million barrels by analysts surveyed by S&P Global Platts. "The focus now shifts to the post-Harvey scenario", he said.

"Demand growth continues to be stronger than expected, particularly in Europe and the United States", the IEA said, raising its 2017 global oil demand growth estimate to 1.6 million barrels per day from 1.5 million bpd.

US West Texas Intermediate (WTI) was up 38 cents, or 0.8 percent, at $48.61 a barrel.

Irma made landfall Sunday as a Category 4 storm, battering Miami before beginning its march up the coast as its fury began to dissipate. "On the flip side, a lack of refining activity means we have seen some hefty draws to the products".

"Power plant outages were largely caused by rain or flooding affecting generator fuel supplies, outages of transmission infrastructure connecting generators to the grid, and personnel not being able to reach generating facilities", said EIA's principal contributors April Lee and Tyler Hodge.

"It looks like we are turning the corner", Phil Flynn, senior market analyst at Price Futures Group Inc in Chicago, said by telephone.

Distillate stockpiles, which include diesel and heating oil, fell 3.2 million barrels, versus expectations for a 1.5 million-barrel drop, the EIA data showed.

"Outright benchmark crude prices gained in August, reflecting higher demand in the northern hemisphere and tight physical markets for oil products", the IEA said.

Oil in NY has closed below $50/bbl since July as efforts to drain a global glut by the Organization of Petroleum Exporting Countries and partners including Russian Federation confront rising shale output.

October natural gas climbed 5.7 cents, or 1.9%, to $3.058 per million British thermal units.

"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. Harvey, the strongest storm to hit the USA since 2004, made landfall as a Category 4 hurricane Friday, with torrential rain flooding cities from Corpus Christi to Houston and shutting plants able to process some 2.26 million barrels a day of oil.

OPEC kingpin Saudi Arabia recently floated the idea of extending the output accord and has discussed it with other cartel members including Venezuela and Kazakhstan, according to media reports.

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