West Texas Intermediate crude for October delivery CLV7, +0.87% jumped 50 cents, or 1%, to $48.73 a barrel, setting it on track for the highest settlement since last Thursday.
In London November Brent rose 89 cents, or 1.6%, to end at $US55.16 a barrel, which was the highest finish since mid-April.
"Based on recent bets made by investors, expectations are that markets are tightening and that prices will rise, albeit very modestly", the IEA said.
Crude oil inventories rose by a smaller-than-expected 5.9 million barrels in the September 8 week to 468.2 million, 2.5 percent below their level a year ago, the Energy Information Administration (EIA) said in its weekly report Wednesday.
The report also stated that refineries reduced output following Hurricane Harvey, while gasoline and distillate inventories declined.
The IEA revised down the global refinery throughput forecast for the third quarter of 2017 by 0.7 million bpd due to Harvey.
Some worries about rising United States crude inventories persisted. "The focus now shifts to the post-Harvey scenario", he said. As Harvey led to widespread flooding, refineries such as Royal Dutch Shell Plc's Deer Park, Texas plant and Exxon Mobil Corp.'s Baytown complex shut and Magellan Midstream Partners LP suspended its inbound and outbound refined products and crude pipeline transportation services in the Houston area. "On the flip side, a lack of refining activity means we have seen some hefty draws to the products". This weekly drop in inventories was smaller than the drop that occurred following a previous outage of the Colonial Pipeline in September 2016, when Lower Atlantic gasoline inventories fell by almost 6 million barrels. That was larger than the S&P Global Platts survey expectations for a 4 million-barrel fall.
"It looks like we are turning the corner", Phil Flynn, senior market analyst at Price Futures Group Inc in Chicago, said by telephone.
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"To a degree that's not too surprising...as those refinery recovery efforts continue to be under way", Tony Headrick, an analyst at CHS Hedging, told the WSJ.
Front-month gasoline futures rose by as much as 6.8 percent to $1.7799 a gallon on the New York Mercantile Exchange.
October natural gas climbed 5.7 cents, or 1.9%, to $3.058 per million British thermal units.
Oil prices were also lifted when the world's energy watchdog said that global oil supplies fell in August for the first time in four months.
"Outright benchmark crude prices gained in August, reflecting higher demand in the northern hemisphere and tight physical markets for oil products", the IEA said.
The global oil surplus is beginning to shrink due to stronger-than-expected European and US demand growth, as well as production declines in OPEC and non-OPEC countries, the International Energy Agency said on Wednesday.
OPEC kingpin Saudi Arabia recently floated the idea of extending the output accord and has discussed it with other cartel members including Venezuela and Kazakhstan, according to media reports.
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