Oil prices rose on Tuesday, helped by expectations for lower supply amid geopolitical risks and steady declines in U.S. inventories.
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Light, sweet crude for December delivery rose 16 cents, or 0.3%, to $52.06 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, gained 5 cents, or 0.1% to $57.42 a barrel.
Crude prices have risen over the past few weeks following an independence referendum in Iraq's northern, semiautonomous Kurdish region. The move has led to clashes with Iraqi forces retaking the oil-rich Kirkuk area, throwing into question Kurdistan's ability to export oil through Turkey and raising doubts about investments from big oil companies.
At the same time, President Donald Trump's decision not to recertify Iran's compliance with a 2015 international agreement to curb the Islamic Republic's nuclear program has also supported oil prices. Mr. Trump's decision has raised the prospect of fresh sanctions on Iran, which would likely disrupt its oil exports and reduce global supply.
"With enough geopolitical risks on the horizon, prices can find a degree of ongoing support," according to Martijn Rats, an analyst at Morgan Stanley. "With several 'hot spots' around the world, and markets tighter than they used to be, this could become an ongoing feature of the market once again," he wrote in a note.
Meanwhile, Saudi Arabia's energy minister on Tuesday reiterated intentions to do whatever is necessary to bring global oil inventories back to the five-year average.
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The Organization of the Petroleum Exporting Countries came to an agreement last year with several other major producers, to curb oil output by 1.8 million barrels a day. As the cartel's November meeting nears, some market participants expect to see another extension of the cuts past the first quarter of 2018.
Many also expect bullish trends in the U.S. to continue, as weekly storage data shows that the amount of crude in storage has been declining. The report from the U.S. Energy Information Administration is scheduled for release Wednesday at 10:30 a.m. ET.
"We're now in a $50 to $55 range, and I think we just chop back and forth as long as the oil inventories remain supportive," said Kyle Cooper, a consultant at ION Energy Group in Houston.
At the same time, demand trends have largely underpinned higher crude prices. Asian demand in particular has been strong, with crude flows to India rising to a new high last month, at 4.6 million barrels a day, according to Kpler. Analysts at consultancy JBC Energy predict "even higher imports" in the last months of the year.
Gasoline futures increased 0.3% to $1.6835 a gallon and diesel futures fell 0.4% to $1.7801 a gallon.
Summer Said contributed to this article.
Write to Christopher Alessi at email@example.com
(END) Dow Jones Newswires
October 24, 2017 11:29 ET (15:29 GMT)