The Paris-based IEA, in its monthly report, noted that the U.S.' reliance on the Gulf Coast makes it vulnerable to similar events like Harvey, saying "normal operations are too important to fail". Over the last month, gasoline demand averaged about 9.6 million barrels per day, up by 0.2% from the same period previous year.
But with oil demand perking up as well as hurricanes and regular summer maintenance knocking out some production, the IEA said it has seen some of that glut disappear.
After Hurricane Harvey halted nearly a quarter of the nation's refining capacity, crude prices in NY slumped as gasoline prices soared. The post-storm recovery will likely bring oil demand to a higher level, gradually offsetting the negative impact, Goldman Sachs said. Gasoline inventories fell more than anticipated-by 7.896 million barrels for the week ending September 8, against an expected draw of 4.0 million barrels.
Irma, which initially hit the Keys in Florida with winds of 130 miles per hour, knocked out power to millions of Florida customers, paralyzed tanker traffic and shut about 6,000 gasoline stations.
At its peak, Hurricane Harvey knocked out more than 10,000 MW of electricity generating capacity in the Texas grid, while relatively cool temperatures across most of the state also reduced natural gas demand.
Momentum building behind the notion that demand for oil is rising and stockpiles are falling resulted in West Texas Intermediate on Wednesday rising $1.07 to settle at $49.30 per barrel and Brent to climb 89 cents to $55.16.
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"The news was taken as confirmation of the prevalent supply tightening narrative, i.e. that the oil surplus is slowly disappearing", said Norbert Rucker, head of macro and commodity research at Julius Baer.
Global output was down by 720,000 barrels a day last month from July, to 97.7 million barrels a day, the International Energy Agency said Wednesday. The producers are seeking to strengthen compliance with the reduction accord they reached a year ago.
OPEC said inventories were falling and that an increase in the price of Brent crude for immediate delivery to a premium over that for later supplies, known as backwardation, raised hopes that a long-awaited market rebalancing was under way. Talks will be held with other OPEC members about extending the cuts at an October 4 meeting of the Gas Exporting Countries Forum in Moscow.
OPEC and allied oil producers will keep reviewing options for their agreement to cut output, and a final decision on extending the deal beyond March could be postponed until the first quarter of 2018, Kuwait's oil minster said.
Information for this article was contributed by Sharon Cho, Wael Mahdi and Jessica Summers of Bloomberg News.
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