Oil prices reined in gains late Wednesday morning as rising U.S. fuel inventories offset a steep drop in U.S. crude stockpiles.
Geopolitical tensions around oil-rich Iraq and Iran and reports that the Organization of the Petroleum Exporting Countries favours extending a deal to cut output through 2018 supported prices.
Brent crude futures, the international benchmark for oil prices, were up 15 cents at $58.03 U.S. Wednesday morning and a third above mid-year levels.
U.S. West Texas Intermediate (WTI) crude futures took on seven cents to $51.95 U.S. per barrel and almost a quarter above mid-June levels.
Data released by the Energy Information Administration mid-morning Wednesday showed U.S. commercial crude inventories fell by 5.7 million barrels to a total of 456.5 million barrels. Analysts in a poll of economists had expected a decrease of 4.2 million barrels
Meanwhile, gasoline stocks rose by 908,000 barrels, compared with analysts' expectations in a poll for a 256,000-barrel gain. EIA data also showed distillate stockpiles, which include diesel and heating oil, were up by 528,000 barrels, versus expectations for a 1.5-million-barrel drop.
EIA data also showed massive drop of nearly 1.1 million barrels a day in U.S. production from the lower 48 States, putting total output at 7.9 million barrels a day.
The decline was due to the impacts Hurricane Nate, which briefly shut down about 92% of U.S. Gulf of Mexico production.
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