Oil prices held near multi-month highs Tuesday on expectations that output cuts by major producers would be extended.
Brent crude, the global oil benchmark, was unchanged at $60.59 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.1% at $54.19 a barrel.
Continue Reading Below
Oil prices have surged this month, with Brent rising around 8% in the past four weeks to a more-than-two-year high on Monday, supported by increased talk that members of the Organization of the Petroleum Exporting Countries and other producers including Russia would extend production cuts beyond the current end date of March 2018.
Tom Pugh, commodities economist at Capital Economics, said the latest push higher was driven by Saudi crown prince Mohammed bin Salman's commitment, made over the weekend, to extend the OPEC production cut agreement with Russia until the end of 2018.
"The new base case is that they will roll over the current cuts to the end of next year," said Mr. Pugh, adding that a failure to follow through on this would see prices fall.
OPEC is due to meet Nov. 30 to discuss the output cuts which were implemented in January in an attempt to accelerate the draining of global stocks after more than three years of surplus supplies. Some analysts warn that even if the meeting's outcome is an extension to the cuts, the market could pull back.
"In case the supply cut deal is confirmed at the end of November oil bulls could also decide the time has come to take profit," said Tamas Varga, analyst at brokerage PVM.
Nymex reformulated gasoline blendstock--the benchmark gasoline contract--rose 0.1% to $1.71 a gallon. ICE gasoil changed hands at $550.25 a metric ton, up $2.75 from the previous settlement.
Write to Sarah McFarlane at firstname.lastname@example.org
(END) Dow Jones Newswires
October 31, 2017 06:40 ET (10:40 GMT)