Oil prices closed at a six-month high, boosted by expectations for lower supply due to geopolitical risks, falling U.S. stockpiles and OPEC's dedication to cutting production.
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 settlement since April 17. Brent, the global benchmark, rose 96 cents, or 1.7%, to $58.33 a barrel.
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On Tuesday, Saudi Arabian Oil Minister Khalid al-Falih 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 group'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.
Many also expect bullish trends in the U.S. to continue, as weekly storage data show that the amount of crude in storage has been declining. The report from the U.S. Energy Information Administration is scheduled for release Wednesday. 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 last Friday.
"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.
The American Petroleum Institute, an industry group, said late Tuesday that its own data for the week showed a 519,000-barrel increase in crude supplies, a 5.8 million-barrel decrease in gasoline stocks and a 4.9 million-barrel decline in distillate inventories, according to a market participant.
Meanwhile, demand trends have largely underpinned higher crude prices. Asian demand in particular has been strong, with crude flows to India rising to a high last month, at 4.6 million barrels a day, according to oil-tracking company Kpler. Analysts at consulting firm JBC Energy predict higher imports in the last months of the year.
Gasoline futures settled up 2.2%, at $1.7155 a gallon, while diesel futures rose 1.9%, to $1.8221 a gallon.
Summer Said contributed to this article.
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(END) Dow Jones Newswires
October 24, 2017 17:15 ET (21:15 GMT)