Oil hits $50 as it nears the August high. A few questions

NOAA satellite image

Global benchmark Brent crude futures, the benchmark for oil prices outside the US, fell 0.13% to $55.09 a barrel.

U.S West Texas instrument was also recuperating some loss it suffered from the past Hurricane devastation; the WTI managed to tally an impressive increase of 84 cents or a total of 1.7% at $50.14 barrels per day. Gold is 0.1 per cent lower at 1,320.40/troy ounce.

This is published unedited from the PTI feed.

Interruptions from Hurricane Harvey, dwindling OPEC production and seasonal maintenance caused output to come down by 720,000 barrels a day last month from July, to 97.7 million barrels a day, the International Energy Agency said Wednesday.

Referencing to the oil production cut agreed by OPEC members, he said all nations need to work together to avoid a supply crunch adding that energy and environmental issues "are of common concern and, as such, can not be pursued in isolation".

"While these bullish forecasts will buoy expectations for a sustained price recovery, we should caution that global oil stockpiles are expected build in the early part of next year", said Stephen Brennock, oil analyst at PVM oil, in a note.

In August, OPEC's total crude oil production eased by 79,000 b/d, to average nearly 32.8 million b/d.

"OECD product stocks were only 35 million barrels above the five-year average at end-July and could soon fall below it because of the impact of Hurricane Harvey", IEA said.

To be sure, previous rallies in the price of crude have fizzled, quickly undoing gains in oil stocks.

USA gasoline stocks slumped by 8.4 million barrels, the largest weekly decline since the data was first recorded in 1990.

Iran's crude oil output last month nearly remained unchanged from July, data by OPEC showed on Tuesday, as production cuts by most members of the Organization of Petroleum Exporting Countries outweighed additional supplies, particularly those of Nigeria.

This week's gains have come despite data showing a big build in USA crude inventories after Hurricane Harvey. On May 25, OPEC and non-OPEC nations agreed to extend the existing level of oil production cut (1.8 mln barrels daily) until April 2018.