The regeneration of oil-hungry refineries in the United States and higher demand forecasts have resulted into the highest weekly rise in oil prices since July.
Oil prices advanced to the highest level in months Wednesday as expectations that OPEC will decide to extend its production-cut deal outweighed pressure from a third-straight weekly jump in US crude supplies and a hefty rise in production.
Brent crude futures settled 14 cents lower at $55.48 a barrel, near an nearly five-month high of $55.99 touched on Thursday.U.S.
Last May, Opec and non-Opec members agreed to extend production cuts for a period of nine months until March, but stuck to production cuts of 1.8 million bpd agreed in November a year ago.
According to him, this was caused by production and export of large volume of crude oil and natural gas by US: "So, the US has turned into a exporting country from importing country". Iraq's Oil Minister said on Tuesday the group was discussing several options, including extending supply cuts until end of next year versus its initial commitment through March 2018.More news: Catalonia Starts Independence Referendum Campaign
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Oil prices have mostly been in an uptrend over the past three weeks since Hurricane Harvey struck Texas and the oil-and-gas rich U.S. Gulf of Mexico on August 26, shutting down a quarter of the U.S. refining capacity of almost 18 million bpd.
In its September report, the IEA revised upwards its estimated demand growth for 2017 to 1.6 million barrels per day, Brent crude oil has averaged just above $50 a barrel through the first 8 months of this year.
The amount of oil in USA storage tanks grew by 4.6 million barrels last week, a larger build than expected, the Energy Department said Wednesday. Ahead of that, will be API's closely-watched inventory sampling at 4:30 p.m. on Tuesday. However, the recovery in USA oil production after Hurricane Harvey will remain the dominant bearish factor capping price gains. "The question now is whether the $50-per-barrel WTI price is attractive enough for shale producers to sell their production forward. The report shows that we're recovering from the hurricane", Rob Haworth, who helps oversee $142 billion at U.S. Bank Wealth Management in Seattle, said by telephone.
"I don't think it's a sure thing they extend the deal at this meeting anyway", Kilduff said.
Crude stocks at the Cushing, Oklahoma, delivery hub rose by 703,000 barrels, EIA said.