Crude palm oil futures remain up on rising demand

Oil market moving back into balance

Oil market moving back into balance

Crude oil prices posted slight gains early Tuesday after OPEC raised its expectations for demand growth, though a Kuwaiti bank warned against over-excitement.

The IEA report came before data from the Energy Information Administration (EIA) showing crude stockpiles rose more than expected last week.

It was said that the gasoline stocks fell by 8.4 million barrels over the past week.

In May, Opec and non-Opec members agreed to extend production cuts of 1.8m barrels per day for a period of nine months until March 2018.

OPEC and 10 producers outside the cartel first agreed late a year ago to cap production at around 1.8 million barrels a day lower than peak October 2016 levels, part of an effort to alleviate the global oil glut and boost prices.

Meanwhile, the International Energy Agency said in its latest monthly report that the global market is starting to tighten due to robust demand and a drop in output from both the OPEC and other producers.

The IEA revised its 2017 global oil demand estimates and said it expected growth to accelerate faster than previous projections.

The IEA the impact of Hurricane Harvey, which struck the US Gulf Coast at the end of August where significant US refinery and export operations are concentrated, on oil markets should be brief.

US West Texas Intermediate crude briefly broke above US$50 a barrel and settled 59 cents, or 1.2 per cent, higher at US$49.89, its highest close since July 31.

Should OPEC keep pumping at August's rate, the market would see a small supply deficit next year, versus a 450,000-bpd surplus implied by last month's report. Gold is 0.1 per cent lower at 1,320.40/troy ounce.

The agency said global oil supply dropped 720,000 barrels a day last month from July, to 97.7 million barrels a day, largely due to civil unrest in Libya and disruptions to US production due to Hurricane Harvey.

Oil is higher for the fourth day in a row as the U.S. refinery industry restarts after Harvey.

"We don't expect a spike up in prices nor do we expect a big drop in prices".

OPEC may attract new non-OPEC countries to the agreement on crude production cap, Kuwaiti Oil Minister Essam al-Marzouk said Wednesday. Talks will be held with other OPEC members about extending the cuts at an October 4 meeting of the Gas Exporting Countries Forum in Moscow.

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