Oil prices held on to their gains in a volatile trade Wednesday after a group of major oil producers said output increased last month, despite their efforts to limit global supply.
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The Organization of the Petroleum Exporting Countries reported its collective production shot up by 90,000 barrels a day in September. The increase was driven by higher production in Libya, Nigeria, Iraq and Gabon.
OPEC also revised upward its forecast for global oil demand growth by about 30,000 barrels a day for both 2017 and 2018.
Brent crude, the global oil benchmark, rose 0.34% to $56.80 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.16% at $51.02 a barrel.
Prices stabilized after wobbling in a bit of "intraday volatility," said Miswin Mahesh, an oil market analyst at Energy Aspects. "They revised demand up slightly. The real sentiment driver is the macro side of things in terms of if we are expecting demand strength to hold."
In recent months, traders have been watching OPEC's output level as producers led by the oil cartel attempt to reduce global oversupply with an output cut.
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Russian and Saudi Arabian officials have signaled they are ready to extend a continuing oil production cut deal to the end of 2018, but some analysts are skeptical that other key oil suppliers would agree to an extension.
Overall, oil futures also received a boost from Saudi Arabia's plans to cut crude exports next month.
Saudi Arabia said it would limit crude export allocations for November to 7.15 million barrels a day, according to analysts from JBC Energy. This would put the kingdom's exports more than 1.1 million barrels a day lower than its record overseas sales in November 2016.
Still, not everybody is convinced by Saudi Arabia's numbers.
"This reduction in supply relates to an unverifiable reference level," said Commerzbank analysts in a recent note. "Saudi Arabian oil exports will actually increase significantly."
Analysts also say other countries such as Russia and Iraq are likely to step in to fill a potential fall in production if Saudi Arabia does reduce its exports.
A softer U.S. dollar may also be supporting prices. The Wall Street Journal Dollar Index, which tracks the dollar against a basket of other currencies, fell 0.22% to 86.44 on Wednesday. As oil is priced in dollars, it becomes less expensive for holders of other currencies as the greenback depreciates.
Other experts attribute oil's ascent to creeping political risk in the Middle East.
President Donald Trump is expected to refuse to certify that Iran is in compliance with the 2015 international nuclear agreement, which could trigger additional U.S. sanctions against Tehran.
Iran boosted its oil production after international sanctions against the nation were removed in early 2016 as part of a nuclear deal with six world powers.
"The market was not pricing in enough of a risk premium for Iran due to what President Trump needs to announce before the end of the week in regards to decertification" of the agreement, said Olivier Jakob, managing director at oil consultancy Petromatrix.
Investors will be watching for oil market data from the International Energy Agency on Thursday.
Nymex reformulated gasoline blendstock -- the benchmark gasoline contract -- rose 1.11% to $1.61 a gallon. ICE gasoil changed hands at $529.50 a metric ton, up $3.50 from the previous settlement.
Christopher Alessi contributed to this article
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(END) Dow Jones Newswires
October 11, 2017 09:46 ET (13:46 GMT)