Oil rises as IEA sees higher oil consumption

Texas shutting down all of its plants has led to 61 percent of U.S. ethylene capacity closing and hasforced the chemical industry into unknown territory

As the Gulf Coast continues its recovery in the wake of Hurricane Harvey the depth of its effects continue to manifest

Hurricane Harvey resulted in US oil production falling by 200,000 bpd in August-outages that occurred mostly in the Eagle Ford shale and offshore in the Gulf of Mexico.

Futures gained as much as 1.8% in NY.

Oil prices rose on Tuesday after OPEC forecast higher demand in 2018 and Russian Federation and Venezuela confirmed their commitment to a production - cutting deal to reduce the global crude glut.

At the same time, "there has been a fair bit of Opec rhetoric in the market the last few days of potentially extending cuts and focusing on reducing exports, which would all be positive".

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 those disruptions to U.S. production due to Hurricane Harvey and supply disruptions in Libya. One option that OPEC and its allies are considering is a six-month extension to supply curbs from the end of March, according to a person familiar with the matter.

The 12 members of OPEC bound by a supply-cutting pact raised their compliance to 82 percent in August from 75 percent in July. "There's more of a bullish mood out there".

West Texas Intermediate for October delivery added 16 cents to $48.03 a barrel. Total volume traded was about 13% above the 100-day average. Meanwhile, WTI crude oil futures were 1.9% higher to $49.1 per barrel and Brent crude was 1.3% higher to $55.0 per barrel. OPEC's own production is being watched closely as countries exempt from the cut - Libya and Nigeria - have boosted output more than expected this year.

"Depending on the pace of recovery for the US refining industry post-Harvey, very soon OECD product stocks could fall to, or even below, the five-year level", it said referring to Hurricane Harvey which hit the United States two weeks ago.

Traders also weighed weekly data from the US government which revealed a smaller-than-expected rise in crude supplies, a hefty drop in gasoline stockpiles and a jump in domestic output as production in the Gulf of Mexico recovered in the wake of disruptions from Hurricane Harvey. Cushing, Oklahoma supplies rose by the most since March, while oil production climbed by the most since 2012.

Early Wednesday, the U.S. Energy Information Administration said domestic crude supplies climbed (http://www.marketwatch.com/story/eia-reports-smaller-than-expected-rise-in-us-crude-supplies-output-climbs-2017-09-13) by 5.9 million barrels for the week ended September 8.

"Impact of the 2017 Atlantic Hurricane season continues to be seen in today's report with a build observed in the commercial crude stockpile and drawdowns in refined products", said Abhishek Kumar, Senior Energy Analyst at Interfax Energy's Global Gas Analytics in London.

Just over half of all U.S. refinery capacity is located in the U.S. Gulf Coast (defined as Petroleum Administration for Defense District 3).

Royal Dutch Shell Plc has handed control of operations at Iraq's Majnoon oil field over to the government following changes to how it was paid for production.

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