Oil rose about 1.4 per cent on Wednesday, gaining support due to signs that the Organisation of Petroleum Exporting Countries and allied producers will continue to curb supplies in December, a weaker United States dollar and as traders covered short positions ahead of an industry report on US crude inventories.
Brent crude LCOc1, the global benchmark, rose 68 cents, or 1.16 per cent, to settle at $59.42 a barrel.
The US crude CLc1 gained 55 cents, or 1.04 per cent, to settle at $53.36.
OPEC and its allies meet on December 5-6 in Vienna to review output policy.
Market participants believe the group known as OPEC+ could decide to extend production cuts “and wait until world demand catches up with the supply situation,” said Andy Lipow, president of Lipow Oil Associates in Houston.
OPEC Secretary-General Mohammad Barkindo has said deeper output cuts are an option. On Tuesday, he said OPEC would do what it could with allied producers to sustain oil market stability beyond 2020.
OPEC, Russia and other producers have agreed to cut oil output by 1.2 million barrels per day until March 2020.
“You did see the OPEC secretary general say OPEC could act to keep the market stable, and if we come back under pressure again we might see that again,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.
In early trading, prices had slipped because of concerns about weaker demand for fuel due to slower economic growth and forecasts of a further rise in US crude inventories.
The dollar weakened after US retail sales data disappointed investors. Oil is traded in US dollars, so oil typically rises when the dollar falls.