By Christopher Alessi 

LONDON--Oil prices advanced Wednesday amid ongoing optimism that production cuts have shown some success in bringing down global inventories.

Brent crude, the global benchmark, rose by 0.63% to $55.51 a barrel in midmorning trading on the Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up more than 1%, at $50.41 a barrel.

"There's a certain degree of optimism in the market," said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas.

Mr. Tchilingurian said investors had been encouraged by a recent decline in commercial oil inventories in the Organization for Economic Cooperation and Development, a group of industrialized oil-consuming nations. "That's a metric that OPEC is using to [assess] if its output cut deal is working," he added.

The International Energy Agency in its latest monthly report said commercial OECD oil stocks stayed flat in July, month-on-month, at 30.016 million barrels, about a 190 million barrels above Organization of the Petroleum Exporting Countries' target of the last five year average. That is 7% above the five-year average, compared with 12% earlier this year, according to HSBC Holdings PLC.

OPEC and 10 producers outside the cartel, including Russia, agreed late last year to cap production at around 1.8 million barrels a day lower than peak October 2016 levels; part of an effort to alleviate the global oil glut and boost prices. The deal was extended in May through March 2018, but has been hindered by both a lack of compliance by some signatories and steady U.S. shale output.

Some cartel members--including less compliant nations like Iraq--have indicated in recent weeks that they would be open to extending the production cuts after the deal expires early next year, but analysts and investors don't expect a final decision until OPEC's next official gathering in November.

"OPEC will have no choice but to consider extending the production cuts beyond March 2018," according to analysts at Commerzbank. "Any increase in the production from the spring of 2018 would...generate renewed oversupply in the oil market and put prices under pressure," the analysts wrote in a note Wednesday.

OPEC and non-OPEC participants in the output cut deal are set to meet in Vienna Friday to review compliance with the agreement.

Meanwhile, the American Petroleum Institute, an industry group, reportedly said Tuesday that U.S. crude inventories had risen by 1.4 million barrels in the week ended Sept. 15. Official weekly data from the U.S. Energy Information Administration is expected later Wednesday.

Among refined products, Nymex reformulated gasoline blendstock--the benchmark gasoline contract--was up 0.42% at $1.67 a gallon. ICE gasoil, a benchmark for diesel, changed hands at $529.25 a metric ton, up 0.14% from the previous settlement.

Write to Christopher Alessi at christopher.alessi@wsj.com

(END) Dow Jones Newswires

September 20, 2017 06:25 ET (10:25 GMT)