USA crude posts 5.1% weekly gain to settle at $49.89

USA crude posts 5.1% weekly gain to settle at $49.89

USA crude posts 5.1% weekly gain to settle at $49.89

Crude oil prices continued to climb on Wednesday, amid hopes for additional global supply cuts, while traders eyed the release of weekly USA stockpiles data due later in the day.

Oil has risen more than 5 per cent in NY since Harvey slammed into the Texas coast on August 25, swamping the heart of the U.S. refining industry and disrupting everything from tanker arrivals to gasoline production.

"Demand is clearly coming back, so there is a need for refining to come back online". Eleven analysts polled ahead of inventory reports from the industry group American Petroleum Institute (API) and the U.S. Department of Energy's Energy Information Administration (EIA) estimated, on average, that crude stocks likely rose 3.5 million barrels in the week ended September 15. At the same time, the Organization of Petroleum Exporting Countries and its allies are said to be discussing extending by more than three months the output cuts that expire in March.

Both reports are expected to show a build in US crude inventories as imports resume and refineries were still restarting after a recent shutdown in the Texas Gulf Coast region due to Hurricane Harvey.

USA energy firms cut seven oil rigs in the week to September 15, bringing the total count down to 749, the least since June, Baker Hughes energy services firm said on Friday.

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The US benchmark West Texas Intermediate for October delivery, which expired Wednesday (Thursday AEST), rose 93 cents to settle at $US50.41 a barrel on the New York Mercantile Exchange. Total volume traded was about 2% below the 100-day average.

Brent for November settlement advanced 66 cents, or 1.2 percent, to $55.80 a barrel on the London-based ICE Futures Europe exchange.

In the previous week, crude stocks climbed 5.9 million barrels, but gasoline inventories plunged by 8.4 million barrels. The global benchmark crude traded at a premium of $5.32 to November WTI.

Despite major Middle Eastern oil producers insisting that they are reducing supplies in a bid to support oil prices, an excess supply is still expected to put a dampener on the market.

The key level for November WTI traders remains $50.30.

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