Oil up 1 percent on Saudi comments, forecast of United States inventory drop

Oil up 1 percent on Saudi comments, forecast of United States inventory drop

Brent crude futures settled up 11 cents at $58.44 a barrel.

USA crude futures rose $1.26, or 2.39%, to $53.90 a barrel - an eight-month high.

According to the U.S. Energy Information Administration (EIA), crude oil inventories rose 856,000 barrels in the week to October 20.

Supply-side strains last year pushed the price of oil below $30 per barrel and movement above $50 per barrel this year is supported by an effort by the Organization of Petroleum Exporting Countries to drain the five-year surplus on global crude oil inventories with managed production declines. Production rebounded from a falloff due to Hurricane Nate, and imports rose.

The bullish comments helped turn sentiment on oil prices positive amid investor concerns over recent data showing both USA crude supplies and domestic production jumped last week. Brent prices rose 4.66% this week and West Texas Intermediate, the USA benchmark, rose 3.97%.

Gasoline futures rose 1.8 cents, or 1.03%, to $1.7686 a gallon. At that time, the OPEC-led group may announce an extension of the production cuts beyond the March deadline.

The Saudi-dominated Organisation of the Petroleum Exporting Companies (OPEC), plus Russian Federation and nine other producers, have cut output by about 1.8 million barrels a day to try to reduce the supply glut.

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Battle with shale: In separate comments, Saudi Aramco CEO Amin Nasser "says he does not spend much time worrying about booming production from US shale fields", according to CNBC.

The Organization of the Petroleum Exporting Countries is expected to debate extending its production cutting agreement through 2018 at its next official meeting in Vienna on November 30.

Government data showed that USA crude production rose 1.1 million bpd last week to 9.5 million bpd after a decline due to Hurricane Nate, while US oil exports hit a new record four-week average of 1.7 million bpd.

Oil slipped on Thursday, pressured by an unexpected increase in U.S. crude inventories, high United States production and exports, but stayed near multi-month highs on support from tighter crude markets.

"Saudi Arabia's determination to rebalance the market, together with ongoing geopolitical tensions in the Middle East, will remain supportive of oil prices", said Abhishek Kumar, senior energy analyst at Interfax Energy's Global Gas Analytics in London.

The gains were reportedly spurred by Mohammad bin Salman, crown prince of Saudi Arabia, telling Reuters on Thursday that "We are committed to work with all producers, OPEC and non-OPEC countries". Kurdish authorities on Wednesday offered to suspend their independence drive, but Baghdad said it would continue its offensive to retake Kurdish territory.

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