Draw In Crude Inventories Lifts Oil Prices

Brent crude futures, the worldwide benchmark for oil prices, were down 78 cents, or 1.4%, at $56.16 late morning Thursday.

EIA today reported a 2.8-million-barrel draw in USA crude oil inventories for the week to October 6, lifting market spirits further amid higher oil demand growth projections from OPEC and growing Middle East tensions around Kurdistan.

At the time of writing, WTI was trading at US$50.32 a barrel and Brent crude was at US$56.17 a barrel.

Traders said they would look to USA fuel inventory data on Wednesday and Thursday for indicators on price direction.

Brent also rose 2 percent the previous day.

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The Organisation for Economic Co-operation and Development's (OECD) commercial stocks fell 14.2m barrels in August to just over 3bn barrels, leaving the surplus 170m barrels over the five-year average, down from 318m barrels at the end of January.

The market was still under pressure, though, from a bearish outlook by the International Energy Agency, which lowered its forecast for oil demand for 2018.

In other news, the International Energy Agency said on Thursday demand for OPEC oil would be 32.5 million barrels per day next year - around 150,000 bpd lower than the cartel pumped last month.

Carsten Fritsch, commodities analyst at Commerzbank in Frankfurt, said the tone of the IEA report was bearish because it suggested that demand for OPEC crude next year would not be sufficient to absorb all the available supplies. But traders say supplies remain ample despite these cuts, thanks in large part to surging USA production.

Figures released by the Energy Information Administration showed USA commercial crude inventories fell by 2.8 million barrels to 462.2 million barrels in the week through October 6. Analysts had forecast a draw of 400,000 barrels.

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