Traders and investors will be on the lookout later on Tuesday for trade group American Petroleum Institute's (API's) weekly sampling of crude stockpiles ahead of official data from the US government on Wednesday.
Oil prices rose on Wednesday after Iraq´s oil minister said Organization of the Petroleum Exporting Countries (OPEC) and other crude producers were considering extending or even deepening a supply cut to curb a global glut, while a report showed a smaller-than-expected increase in us inventories.
USA crude futures climbed 1.2% to $50.09 a barrel, and Brent rose 1.2% to $55.80 per barrel.
Meanwhile, US oil production has largely recovered from the shutdowns following Hurricane Harvey, now standing at 9.51 million barrels per day (bpd), up from 8.78 million bpd directly after the storm hit the US Gulf Coast. The International Energy Agency's (IEA's) upward revision of its global oil demand growth forecast, together with weakness in the USA dollar index, will support prices.
Refinery crude runs rose by 1.1 million barrels per day, EIA data showed.
While Iraq's Oil Minister Jabbar Al-Luaibi said on Tuesday that some nations were talking about a further 1 percent cut, his Russian counterpart Alexander Novak told RIA Novosti on Wednesday that there's no formal proposal to do so.
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It was the third consecutive week crude inventories increased in the USA, as heavy flooding due to storm Harvey knocked out almost quarter of the nation's refining capacity in August, pressuring demand for crude oil, the primary input at refineries.
"We could see some payback in oil prices in the short term", Pedersen said.
Oil production also improved significantly to 9.51 million barrels per day, which reduced to 8.78 million bpd after it was affected by storm Harvey that hit the US Gulf Coast.
Market participants initially shrugged off Wednesday's report by the U.S. Energy Information Administration showing that crude stockpiles rose more than expected last week. The profitability line in shale oil production in U.S. reduced to $45-50 a barrel in recent days, while it was $60 in previous years.
"There are still a ton of barrels offshore looking to come onshore", he said, referring to stalled imports into the U.S. Gulf of Mexico since the hurricane.
Conversely, due to demand, Nolting says prices won't fall dramatically either: "So I think it's quite stable in the oil sector".
Inventories of diesel and other distillates slid to the lowest level since 2011 while exporters shipped 5.42 million barrels of oil and fuels amid the recovery from Hurricane Harvey, the report showed.