He and Ireland team mate Eddie Dunbar caught and then dropped an earlier breakaway group to arrive together at the stage end at the top of the category one climb of Gallows Hill.
O'Loughlin took the win to add to his victory in Tuesday's opening time trial.
Dunbar, from Cork, remains in the leaders Yellow jersey with O'Loughlin second and strengthening his hold on the White jersey of best First Year junior.
Tomorrows final stage is a circuit race in Ennis.
