Oil prices climb as traders eye another U.S. crude drawdown

U.S gasoline futures, however, jumped 2.8 percent and gasoline cash prices in the Gulf Coast rose to the highest levels in nearly a year on fears of the hurricane and flooding damaging refineries.

Crude oil inventories continued to drop.

Beyond the storm's potential impact on the oil industry, crude remains in ample supply globally despite efforts led by the Organization of the Petroleum Exporting Countries to hold back production in order to prop up prices.

Official government inventory data for last week will be released on Wednesday at 10:30 a.m. EDT (1430 GMT).

On the New York Mercantile Exchange crude futures for October delivery jumped 0.63% to $47.73 a barrel, while on London's Intercontinental Exchange, Brent rose 0.71% to $52.41 $52.05 a barrel.

"OPEC production curtailments did not achieve the desired price outcome, and once again Texas and the US are the chief offenders-and I say that with great pride", Ingham said. The nearest contract in the $50s is September 2020 at $50.03.

US West Texas Intermediate crude futures traded at $48.50 a barrel, down 1 cent.

US crude futures for September delivery closed 27 cents, or 0.6 percent, higher at $47.64 while the more active October contract ended the session up 30 cents at $47.83.

Libya´s Sharara oil field, the country´s largest, was gradually restarting on Tuesday after a shutdown, although instability in the country means that output there could be volatile, traders said. Elsewhere, a shutdown of Libya's Sharara oilfield due to a pipeline blockage provided some upside.

Will the U.S. and Libya's Crude Oil Production Weigh on Prices?

A day after API's estimate of oil and gasoline inventories pressured prices, the EIA gave the market cause for optimism by reporting not only a draw of 3.3 million barrels in crude oil inventories for the week to August 18, but also a draw in gasoline inventories, contrary to what the API had reported.

Meanwhile, U.S. crude production has broken through 9.5 million bpd, its highest since July 2015.

Analysts said falling crude inventories, despite rising output, indicated the market was tightening."The trajectory of crude inventories is clearly down and it will be surprising if the market will be able to ignore continued drawdowns", said William O'Loughlin, investment analyst at Australia's Rivkin Securities.

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