On the regular New York Mercantile Exchange (NYMEX) trading on Tuesday, September crude futures closed 38 cents higher at $21.74. October Brent contract on the Singapore International Monetary Exchange (SIMEX) was untraded, but quoted at $20.60/$20.82 per barrel.

The contract rose 31 cents to settle at $20.74 on London's International Monetary Exchange (IPE) on Tuesday. The market had bullish expectations of the US oil data, predicting a fall in crude and gasoline stocks due to a typical rise in demand at this time of the year.

An earthquake in western Turkey that caused a fire at the Tupras refinery which handles 226,000 barrels per day also supported prices. But while the American Petroleum Institute (API) reported late on Tuesday a drawdown in crude stocks of over three million barrels for the week ended August 13, it also reported a rise in gasoline stocks of 337,000 barrels.

The fall in crude stocks was larger than market expectations of a 1.8 million barrel drop. But API's gasoline inventories data dampened sentiment, as the market was expecting a large 2.3 million barrel drop.

Traders said the market was focused on gasoline data, which is a big driving force for the oil complex during the summer driving season. "It's a question of whether crude can hold the whole complex up, but products are going to be negative," Tom Benz of Paribas Futures Inc. said.

Despite the bearish API data, the market was watching for figures from the US Department of Energy, considered to be more reliable, to confirm the trend shown by the API numbers.

Oil prices have found support, hovering around 22-month highs this week, on signs that the Organisation of Petroleum Exporting Countries (OPEC) have adhered closely to their pledges to reduce output.

Last week's US Oil data, which showed a drawdown in crude and product stocks spurred prices higher as it raised market confidence that output cuts were trimming supplies.

The output cut agreement, aimed at raising prices from historical lows touched at the start of the week, is to last until end March, 2000.

The Director General of the Norwegian Oil and Energy Ministry Tore Sandvold said on Tuesday the production cuts should remain in place "for the time being" despite the higher oil prices.

Last year, non-Opec member Norway said it would restrain production by 200,000 bpd in 1999 to help lift prices.