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U.S. oil prices climb amid drop in stockpiles, strong gasoline demand

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By Reuters
U.S. oil prices climb amid drop in stockpiles, strong gasoline demand
A pumpjack is seen at the Sinopec-operated Shengli oil field in Dongying, Shandong province, China January 12, 2017. REUTERS/Chen Aizhu   -   Copyright  AIZHU CHEN(Reuters)

TOKYO (Reuters) – U.S. oil prices extended gains on Thursday amid another drawdown in U.S. crude inventories and strong local gasoline demand, while signs OPEC may not raise output to address shrinking supplies from Iran also buoyed markets.

U.S. West Texas Intermediate crude for October delivery <CLc1> was up 31 cents, or 0.4 percent, at $71.43 a barrel by 0018 GMT, after settling up $1.27.

Front-month London Brent crude, for November delivery <LCOc1>, was down 2 cents at $79.38, having ended up 37 cents.

U.S. crude oil stockpiles fell for a fifth straight week to 3-1/2 year lows in the week to Sept. 14, while gasoline inventories also showed a larger-than-expected draw on unseasonably strong demand, the Energy Information Administration said on Wednesday. [EIA/S]

Crude inventories fell by 2.1 million barrels, the EIA data showed, compared with expectations for a decrease of 2.7 million barrels.

U.S. sanctions affecting Iran’s oil exports come into force on Nov. 4 and many buyers have already scaled back Iranian purchases. But it is unclear how easily other producers can compensate for any lost supply.

The Organization of the Petroleum Exporting Countries and other producers including Russia meet on Sunday in Algeria to discuss how to allocate supply increases within their quota framework to offset the loss of Iranian supply.

OPEC sources have told Reuters no immediate action was planned and producers would discuss how to share a previously agreed output increase.

(Reporting by Osamu Tsukimori; Editing by Joseph Radford)