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While any cut agreed by OPEC at its Nov. 30 meeting could take effect as soon as Dec. 1, traders say the biggest price impact will be in contracts for delivery in early 2017, especially the February contract, rather than in the spot market.
The American Petroleum Institute reported that U.S. crude stocks rose by 4.8 MMbbl in the week ended Oct. 21 vs. a 1.7 MMbbl build forecast by analysts polled by Reuters.
Efforts from more than 50 countries pushed global offshore oil production to more than 27 million barrels per day in 2015, according to the EIA.
The nearly even support suggests ambivalence in the industry between two rivals who have put forward wildly different energy visions.
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.