Oil prices kept an upward momentum for the second week running, with Brent finishing at $61.54 per barrel and WTI advancing to $56.52.
Bullish sentiment returned to the market after the US and China agreed to hold trade talks in October that renewed hopes for a resolution to their dispute.
The Energy Industry Administration released a positive weekly inventory report. Strong drawdowns in US crude oil and gasoline inventories, and a dip in production eased fears of an imminent recession.
The EIA said that crude inventories dropped by 4.8 million barrels to 423 million barrels. EIA data showed large demand for gasoline and distillate fuels such as diesel and heating oil.
An increase in output from both OPEC and Russia did not appear to weigh on prices even as some market participants made much of the uptick in OPEC production of just 150,000 barrels in August.
OPEC production in August was 29.71 million million barrels per day (bpd), while in July the group accounted for 29.56 bpd. In July, OPEC compliance for cutting 1.2 million bpd was 159 percent.
Still, that wasn’t enough to lift prices as traders remained focused on the grim global economic outlook.
The oil media largely ignored the slowdown in upstream spending that is being driven by the uncertainty over the direction of the oil price.
This raised questions over the growth in US shale output that is so sensitive to downward oil price movement.
New US pipeline capacity starting up in the second half of 2019 will speed the transport of shale oil from the Permian Basin and Eagle Ford to export terminals around Houston and Corpus Christi. This could have a drastic impact on prices for the US measure.