Oil prices closed at a six-month high on Tuesday, boosted by expectations for lower supply due to geopolitical risks, falling U.S. stockpiles and OPEC's dedication to cutting production.
Continue Reading Below
Light, sweet crude for December delivery gained 57 cents, or 1.1%, to $52.47 a barrel on the New York Mercantile Exchange, the highest settle value since April 17. Brent, the global benchmark rose 96 cents, or 1.7%, to $58.33 a barrel.
On Tuesday, Saudi Arabia's energy minister reiterated intentions to do whatever is necessary to bring global oil inventories back to the five-year average.
"We won't stop halfway...and we won't do anything that will shock the market," he said.
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.
"We're getting a lot of positive comments out of OPEC nations and mostly from the Saudis, which is a good sign," said Peter Cardillo, chief market economist at First Standard Financial.
Continue Reading Below
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. Analysts and traders surveyed by The Wall Street Journal expect stockpiles to have decreased by 2.2 million barrels, on average, in the week ended Oct. 20.
"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 settled up 2.2% at $1.7155 a gallon and diesel futures rose 1.9% to $1.8221 a gallon.
Summer Said contributed to this article.
Write to Stephanie Yang at firstname.lastname@example.org and Christopher Alessi at email@example.com
(END) Dow Jones Newswires
October 24, 2017 16:28 ET (20:28 GMT)