Oil extended gains after closing at a seven-week high as a third of the Gulf of Mexico's crude output was halted by a storm and USA crude inventories declined more than expected.
Disappointing U.S. crude inventories and the looming storm in the Gulf of Mexico which may disrupt oil production, among others, contributed to the upswing, experts noted.
The market was also bolstered by the news that a tropical cyclone is likely later this week in the Gulf of Mexico, raising concerns over potential disruptions to oil and natural gas production in the region.
In light of the uncertainties affecting the global oil market and in an effort to avoid a destabilising build-up in oil inventories, the report indicated that OPEC and non-OPEC countries participating in the Declaration of Cooperation agreed to extend voluntary production adjustments until 31 March 2020, reaffirming their continued commitment to promote and enhance oil market stability The OECD is forecast to grow by 0.09 mb/d next year, with only OECD Americas showing positive growth, while OECD Europe and Asia Pacific are anticipated to continue to decline.
Futures in NY rose as much as 0.7% after climbing 4.5% on Wednesday to close above $60 a barrel for the first time since May. A fourth weekly draw in American stockpiles and signs that the Federal Reserve is prepared to cut interest rates also supported prices.
Still, U.S. output is rising again after a brief drop from record levels, according to the EIA.
U.S. West Texas Intermediate (WTI) crude futures fell 23 cents to settle at $60.20 a barrel, after hitting their highest since May 23 at $60.94.
Oil's latest spike came after the Organization of Petroleum Exporting Countries, which pumps 40% of the world's oil, estimated in its July report released on Thursday that it will be producing about 560,000 barrels per day more than needed by next year, no thanks to the continued surge in USA shale oil output. The contract closed on the ideal stage since Might 22 on Wednesday.
Brent crude futures were up 40 cents at US$67.41 a barrel by 0947 GMT. It climbed 4.4 per cent to US$67.01 on Wednesday, the highest close since May 29.
Five boats believed to belong to Iranian Revolutionary Guards approached a British oil tanker on Wednesday and asked it to stop in Iranian waters close by, but withdrew after a British warship warned them over radio, a USA defence official said on Thursday.
Magnitude 4.6 natural disaster rumbles western WA
The quake occurred at a depth of 10 kilometers and it was initially ruled to be a magnitude 4.7 before it was revised to a 4.4. Geological Survey reports that a 4.6 magnitude natural disaster has rattled the Three Lakes area of Washington state.