A rise in USA gasoline prices also supported prices.
United States benchmark West Texas Intermediate (WTI) for delivery in October was up two cents to $47.17 in afternoon trade, reversing losses earlier in the day.
The US Energy Information Administration is expected to release the official data on U.S. crude stockpiles on Wednesday, which is generally viewed as a gauge of crude demand in the world’s top oil consuming nation.
Some analysts expect an erratic but continuous recovery from the 6-1/2 year lows of $42.23 hit in Brent and $37.75 in U.S. crude in August.
But Wednesday’s EIA report showed that oil in storage tanks at the Cushing, Oklahoma, delivery hub fell by 1.906 million barrels.
“We believe that this could be the market’s reaction to the decline in USA crude production (drilling)… further exacerbated as Iranian crude could be entering the market, which puts heavy pressure on the global benchmark (Brent)”, said Daniel Ang, analyst at Singapore-based Phillip Futures.
OPEC’s market share has shrunk in the past few years to 33 percent from as much as 40 percent in previous years because of a US shale oil boom and new fields coming on stream in countries such as Canada and Russian Federation.
The monthly report from the Organisation of the Petroleum Exporting Countries (Opec), however, trimmed its estimate for 2016 global oil demand growth and predicted a less dramatic slowdown in non-Opecsupply than the worldwide Energy Agency.
“Iraq’s government has asked oil companies to reduce their 2016 spending plans, citing lower oil prices and falling government revenue”.
“The supply and demand numbers suggest that the low oil prices are starting to have an impact on US crude oil production growth”. That would be seen as a bearish signal for oil as it makes fuel more expensive for importers who hold other currencies.
Venezuela has been calling for output cuts to prop up prices and President Nicolas Maduro said on Tuesday he would travel shortly to seek support for his push for a summit between OPEC and non-OPEC producers.
Higher USA interest rates would likely attract cash from money traders, lifting the dollar.
“A total stockpile of 153 million barrels for distillates is huge”.