Oil up on draw in US fuel stocks but concerns weigh

Oil edged higher towards $77 a barrel yesterday after hitting a two-month low, after a strong drawdown in US gasoline and diesel inventories augured for a coming seasonal rebound in refining demand. Traders were also focused on the return to looming US sanctions on oil exporter Iran, balancing that against growing worries about weakening worldwide demand. Brent crude LCOc1 was up 11 cents at $76.55 a barrel by 10:53 am EDT (1453 GMT).

The global benchmark fell earlier in the session to $75.11, lowest since Aug. 24. US West Texas Intermediate crude futures CLc1 rose 45 cents at $66.87 per barrel, holding onto gains despite a larger-than-expected increase in U.S. stockpiles of oil. US crude inventories rose by 6.3 million barrels last week, the US Energy Department said, more than the 3.7 million-barrel increase expected in a Reuters poll.

However, gasoline stocks fell 4.8 million barrels last week to 229.33 million, the lowest since December 2017, and distillates, which include diesel, were down 2.3 million barrels, both more than forecast.