By Alison Sider 

Oil prices rose for a fourth straight session to hit three-week highs Wednesday after government data showed a larger-than-expected draw from U.S. crude stockpiles.

U.S. crude futures settled up 16 cents, or 0.31%, at $52.04 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 27 cents, or 0.47%, to $58.15 a barrel on ICE Futures Europe.

Still, oil prices pulled back from earlier gains and at times traded in negative territory as investors tried to gauge the impact of Hurricane Nate on last week's data, as well as figures indicating that fuel demand declined last week.

The U.S. Energy Information Administration reported Wednesday that crude inventories fell by 5.7 million barrels last week, more than the 3.2 million barrels that analysts were expecting, according to a survey by The Wall Street Journal.

But some of that was driven by a sharp but temporary decrease in oil output as offshore producers shut in around Hurricane Nate, which hit the Gulf Coast earlier this month. U.S. production fell nearly 1.1 million barrels a day last week, according to the EIA.

"Normally we would expect the market to have a more positive tone to it, but people are expecting we'll jump back up," said Gene McGillian, research manager at Tradition Energy. "This report is basically being shrugged off because of the effects of Nate."

Much of the draw from oil stockpiles was driven by another big increase in exports of U.S. crude, which rose to 1.798 million barrels a day for their second highest level on record. Exports have surged in recent weeks as the price difference between U.S. and global crude benchmarks has widened, making it more lucrative to sell U.S. oil overseas.

But data showing that gasoline inventories increased by 900,000 barrels -- even though refinery utilization fell sharply from 89.2% to 84.5% -- gave some investors pause. That could be a sign that demand is due to drop off following the end of summer driving season, analysts said. Analysts at Capital Economics said total petroleum products consumption fell to its lowest level since April, and said a drop in demand was largely to blame for the rise in gasoline stockpiles.

Andy Lipow, president of Lipow Oil Associates, said the drop in refinery activity was largely due to the storm, which prompted some plants to shut or slow down as a precautionary measure. He expects that rising U.S. exports, additional refinery demand, and growing tensions in the Middle East could push the global benchmark to $60 a barrel by January.

Oil prices have been buoyed in recent days by fears of a supply interruption from the oil-rich region of Kirkuk because of clashes there between Iraq's central government and the semiautonomous Kurdish region.

But Iraq's oil minister told The Wall Street Journal Tuesday that production from the area was running normally, and some analysts said that worries have eased for the moment.

"I think at least some of the premium that was put in, we're just not showing any sustained follow-through from there," said Tariq Zahir, managing member of Tyche Capital Advisors. "We're in this range, it's not really going anywhere."

Gasoline futures rose 1.28 cents, or 0.79%, to $1.6429 a gallon. Diesel futures rose 0.7 cent, or 0.39%, to $1.8028 a gallon.

Write to Alison Sider at alison.sider@wsj.com

(END) Dow Jones Newswires

October 18, 2017 16:01 ET (20:01 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.