Top oil executives gathered at the S&P Global Platts APPEC conference in Singapore said strong oil demand this year was accelerating market rebalancing and helping inventory drawdowns.

A surge Monday in WTI futures pushed oil prices into a bull market, as they climbed by more than 20% from lows in June. All of this unfolded against the backdrop of strict OPEC adherence to supply curbs.

"It's all driven by the idea is that the production cut is starting to work and the rebalance is under way", said Gene McGillian at US-based consultancy Tradition Energy. As refineries continued to revive fuel-making units trampled by Harvey, their need for crude has increased, he said.

Tan said the research house believes the industry is more focused on robust activity at stable oil prices, rather than very high oil prices at this juncture, which may not be sustainable.

On Friday, the Organisation of the Petroleum Exporting Countries and other producers will meet in Vienna to discuss the progress of their deal to limit output. "We have the tap", Erdogan said.

London Brent crude for November delivery LCOc1 gained 1% to touch $59.03 a barrel, while the USA crude for November delivery CLc1 slipped 10 cents and traded at $52.12 per barrel, reported Reuters. Total volume traded was about 7 per cent below the 100-day average.

At 2:29pm BST, the Brent front month futures contract was down 1.34% or 79 cents to $58.23 per barrel, having spiked by 4% to within touching distance of $60 intraday - it's highest level since July 2015 - before retreating during afternoon European trading.

Traders dumped US crude spreads after Harvey disrupted USA crude refining and petroleum transport.

Hedge fund positioning in Brent and especially WTI is less lopsided, with net positions and ratios in both crudes well below the peaks set earlier this year. This comes amid broader forecasts for bumper USA oil supplies.

At the US storage hub of Cushing, Oklahoma, also known as the delivery point of the WTI contract, inventories are still near seasonal highs at almost 60 million barrels.

Inventories at the Cushing, Oklahoma, storage hub climbed by 1.06 million, the API data showed, which would be the biggest build since March if the EIA confirms it.

The net long position in Brent rose by 34 million barrels to 465 million, the highest for six months, according to records published by regulators and exchanges.

Ed Morse, global head of commodities for Citigroup, remarked, "We're seeing more and more evidence that it's not the worldwide oil companies, it's not the independent oil companies that are lagging new investments, but it's OPEC countries lagging, particularly those five".