Oil rises 1pc after boost from US fuel demand

LONDON, Oct 31 (Reuters): Oil prices gained 1.0 per cent on Thursday after rallying the previous day on stronger than expected US fuel demand and reports that producer group OPEC+ could delay a planned output increase.
Traders are also awaiting the outcome of the US presidential election on November 5 and whether ceasefires can be brokered in the Middle East.
Brent futures rose by 75 cents, or 1.0 per cent, to $73.30 a barrel by 1320 GMT. WTI futures were up 91 cents, or 1.3 per cent, at $69.52. Both contracts gained more than 2 per cent on Wednesday.
US gasoline stockpiles fell more than expected to a two-year low in the week ending October 25, the Energy Information Administration said, while crude inventories registered a surprise drawdown as imports slipped.
"The surprise decline in U.S. gasoline stockpiles provided a buying opportunity as demand appeared stronger than anticipated," said Fujitomi Securities analyst Toshitaka Tazawa.
Further support came from a potential delay to planned OPEC+ oil production increases from December by a month or more because of concern over soft oil demand and rising supply.
A decision could come as early as next week, Reuters reported. OPEC+ is scheduled to meet on December 1 to decide its next policy steps.
Elsewhere, manufacturing activity in China, the world's biggest oil importer, expanded in October for the first time in six months, suggesting stimulus measures are having an effect.
Brent and WTI futures had fallen by more than 6 per cent on Monday on reduced risk of Iran's direct involvement in the wider Middle East conflict and negotiators are now pushing for ceasefires in Lebanon and Gaza.
With ebbing fears of war in the Middle East spreading further, market attention has turned back to expectations for deteriorating global oil balances in 2025, when supply is expected to exceed demand, said Ole Hansen, head of commodity strategy at Saxo Bank.