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Oil prices rose on the news, with U.S. crude hitting a high not seen since July of last year. West Texas Intermediate crude extended gains to $51.65/bbl, up 2.7%, while Brent crude gained 2.2% to $52.79/bbl.
Saudi Arabia's Khalid al-Falih gave an upbeat message to an audience of industry executives on Oct. 19, saying the oil market was at the end of a downturn and producer action to limit supply would help it improve further.
After the kingdom pumped a record high 10.673 million barrels per day in July due to summer demand and requests from customers, its August output dropped to 10.63 million barrels per day.
Brent crude rose 38 cents, or 0.8%, to $51.90 a barrel by 6 a.m. CT (11 GMT) on Oct. 18. U.S. West Texas Intermediate (WTI) crude was up 45 cents, at $50.39.
Traders said that WTI was under pressure from a report that U.S. drillers added four rigs last week, which was the 16th week in a row that oil drillers had gone without making cuts, indicating more production to come.
Oil prices edged up on Oct. 14, pushed by a tighter U.S. fuel market and as technical indicators attracted buying from financial players, but doubts over the feasibility of a planned production cut still weighed on markets.
Crude inventories rose by 4.9 million barrels in the week to Oct. 7, compared with analyst expectations for an increase of 650,000 barrels. Crude stocks at the Cushing, Okla., delivery hub fell by 1.3 million barrels, EIA said.
The price of crude oil climbed on Oct. 13, gaining support from record Chinese imports, but gains were limited after OPEC said its production had risen to the highest level in at least eight years and following reports of an increase in U.S. crude stocks.
China's strategic reserve is preparing to start filling late this year newly-built storage tanks that can take some 19 million barrels of crude, or about three days worth of imports, traders said.
While OPEC and other big crude producers work towards a deal to cap production to erode a glut, industry executives are concerned of another crisis—a supply shortage.
For an industry increasingly reliant on gadgets such as digital sensors, infrared cameras and drones to monitor security and check for leaks, the sabotage on Oct. 11 illustrated how vulnerable pipelines are to low-tech attacks.
For now, Saudi Arabia, Kuwait and other Middle Eastern producers have the spigots wide open.