Oil prices rise as USA crude stocks drop

Oil prices recovered on Tuesday from six-week lows, with US crude rising as much as 1 per cent, as the market weighed up OPEC comments that a possible production freeze agreement could last longer than expected.

In a knee-jerk reaction, West Texas Intermediate oil futures extended gains surging to intraday highs, in North American trade on Wednesday, after data showed that oil supplies in the US unexpectedly fell.

He previously said discussions in Algiers would be consultations and no major decisions would be made during talks with OPEC and non-OPEC producers. U.S. crude stockpiles dropped by 7.5 million barrels last week, the American Petroleum Institute was said to report on Tuesday.

Expectations from analysts polled by Reuters were for an inventory build of 2.3 million barrels, while S&P Global Platts estimated stockpiles had gone up by 2.8 million barrels. According to the latest figures from the USA government, total production for the United States this year is expected at 8.8 million bpd. It was the biggest weekly drop since 1999.

Last week, oil prices had spiralled lower on gloomy market forecasts, profit-taking and ever-present worries over the global supply glut, ahead of the producers' meeting on September 26-28.

Also, North Sea output became under threat as more than 300 Norwegian oil service workers went on strike after wage talks broke down.

International Brent crude futures were at $46.47 per barrel, up 59 cents, or 1.3%, from their last close.

The process of re-balancing the oil market must be "fast-tracked", Barkindo said at a conference in Rome.

"We are still very well supplied for this time of year", said Tariq Zahir, trader in crude oil spreads at Tyche Capital Advisors in NY, referring to total USA crude stocks that stood at record seasonal peaks of almost 505 million barrels.

An unexpected draw in the latest API inventories data pushed crude futures higher after Tuesday's U.S. close.

For Brent, he said that prices may test support at $45.63 per barrel and, failing to hold that level, could fall to just over $45 a barrel.

Refinery crude runs (USOICR=ECI) fell 143,000 bpdas utilization rates (USOIRU=ECI) fell 0.9 percentage point to 92 percent of total capacity, EIA data showed. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 2% at $44.91 a barrel.

"The Colonial pipeline mess is evident in the gasoline data, which showed supplies stranded in the Gulf and drawn down in the East". "We will have to see if the trends normalize next week".