Oil prices rose on Wednesday after U.S. weekly inventory data showed crude stockpiles falling to their lowest level in six months, while Hurricane Ivan's passage toward the Gulf of Mexico further heightened supply fears.

New York light crude (CLc1) rose 69 cents to $45.08 after touching a two-week peak of $45.30 as news of the tighter crude supply picture overrode OPEC's attempt to calm the market with a four percent hike in official output.

The U.S. government Energy Information Administration said commercial crude inventories fell 7.1 million barrels to 278.6 million barrels in the week to Sept 10, taking crude stocks to their lowest since late February.

A 1.7 million-barrel distillate build mitigated some of the bullish sentiment. Traders are focusing more on distillates, particularly heating oil, as the northern hemisphere winter approaches.

The EIA said heating oil stocks rose 1.7 million barrels to 53.1 million.“This is an extremely bullish report, with the big draw on crude stocks in the DOE (EIA) report,” said Phil Flynn, market analyst at Alaron Trading.

Analysts said delays due to recent hurricanes could have contributed to lower crude imports, which fell about 800,000 barrels per day to just under 10 million bpd.

But with Hurricane Ivan, one of the fiercest Atlantic storms on record, still sweeping toward the Gulf of Mexico where 25 percent of U.S. oil and gas is produced, more disruptions looked likely to come through into next week's inventory figures.

Oil companies had shut just over one million barrels per day (bpd), or 61 percent, of offshore crude oil output on Tuesday, according to the U.S. Minerals Management Service.

Continued suspension of crude exports from northern Iraq due to pipeline sabotage also fostered bullish sentiment.

OPEC AGREES TO HIKE FORMAL OUTPUT

OPEC agreed at its meeting in Vienna to raise formal output limits by one million barrels a day, four percent, to 27 million bpd, Venezuelan Oil Minister Rafael Ramirez confirmed.

New supply quotas in the Organization of the Petroleum Exporting Countries will be effective from November 1.OPEC will meet again on December 6 in Cairo, Kuwaiti Oil Minister Sheik Ahmad al-Fahd al-Sabah said.He said OPEC had made no change to its $22-$28 price target.

The million barrel quota hike is designed to underline OPEC's intent to bring crude prices back below $40 a barrel.Saudi Oil Minister Ali al-Naimi reiterated on Wednesday that current prices were too high, but said there was no sign that the market's strength was damaging demand.

Oil prices have remained stubbornly high despite OPEC lifting supplies this summer to a 25-year high to meet demand growth led by China's booming economy.

Wednesday's deal will do little to change real supplies -- OPEC is already pumping some two million bpd over existing limits of 26 million bpd.

“We would see this as more of a housekeeping exercise rather than being of any immediate significance for prices,” wrote analysts at Barclays Capital.

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