Oil prices decline as USA crude stocks soar

Oil market moving back into balance IEA

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

U.S. light crude was unchanged at $49.30 after gaining 2.2 per cent in the previous session.

October West Texas Intermediate crude for October delivery jumped $US1.07, or 2.2%, to settle at $US49.30 a barrel in NY - the highest finish since August 9.

Brent oil is also trading higher, gaining 1.02% and now trading for $55.66 per barrel.

Electricity demand in the Texas grid, which is overseen mostly by the Electric Reliability Council of Texas (ERCOT), was lower than usual for the time of year "mainly because of the customer outages in storm-affected areas in South Texas and along the Gulf Coast and cooler temperatures across much of the state", EIA said.

"OECD product stocks were only 35 million barrels above the five-year average at end-July", the IEA said.

The American Petroleum Institute said that crude stockpiles in the United States increased by 6.2 million barrels in the week ending 8 September to 468.8 million, almost double from the analysts' expectations.

The build came after Hurricane Harvey shut production in some Gulf of Mexico fields and refineries in Texas as some domestic producers also trimmed output to avoid a larger glut at storage. Harvey made landfall on the Texas coast on August 25. "On the flip side, a lack of refining activity means we have seen some hefty draws to the products". All-in-all, the equivalent of the sanction is estimated to be at a 2 million barrels on an annual rate. That was larger than the S&P Global Platts survey expectations for a 4 million-barrel fall.

"It looks like we are turning the corner", Phil Flynn, senior market analyst at Price Futures Group Inc in Chicago, said by telephone. This compared to expectations that inventories would rise by 3-million barrels. OPEC and IEA think increased production in both Canada and Kazakhstan will offset most of the production losses in the US.

Futures gained as much as 1.8% in NY.

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

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.

"In St. Petersburg we agreed that once Nigeria reaches the 1.8 mln barrel daily oil production level and is able to maintain it for two months or more it will join other OPEC nations", he said.

Russian Federation and Saudi Arabia have discussed extending the output cut, but no specific decisions have been made, the TASS news agency reported last week.

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