NEW YORK - Oil prices rose for the third day on Wednesday as OPEC forecast higher demand for 2018 and heightened tensions in Kurdistan supported prices.
Brent crude futures <LCOc1> rose 33 cents, or 0.6 percent, to settle at $56.94 per barrel. Brent rose 2 percent the previous day.
U.S. West Texas Intermediate (WTI) crude futures <CLc1> rose 38 cents, or 0.8 percent, to $51.30 a barrel.
On Wednesday, the Organization of the Petroleum Exporting Countries forecast stronger demand for its oil in 2018 and said its production-cutting deal with rival producers was clearing the glut after more than three years.
U.S. oil exports are pouring into the market at a record pace, but the world's second largest crude trader Glencore <GLEN.L> said demand should be strong enough to absorb the volumes along with those from competitors in the North Sea and West Africa.
"I think the market is able to absorb that 2 million bpd of U.S. exports easily," said Glencore's head of oil trading Alex Beard told the Reuters Global Commodities Summit. "I don't think there are many losers out there."
Saudi Arabia said it pumped 9.97 million barrels per day in September, up about 22,000 barrels per day from August, but below its OPEC target.
OPEC and other producers, including Russia, agreed to cut output by 1.8 million barrels per day (bpd) through March 2018 to balance the market. The United States is not party to the deal, and its crude output has risen 10 percent this year to more than 9.5 million bpd. <C-OUT-T-EIA>
After settlement, the American Petroleum Institute will release weekly U.S. fuel inventory data, and the U.S. Department of Energy reports official data on Thursday. [EIA/S]
Rob Haworth, senior investment strategist at U.S. Bank Wealth Management said OPEC and oil bulls were "hoping U.S. producers slow down production and make further progress on inventory cuts." He said the picture was "not clear because you still have hurricane related news."
U.S. crude inventories probably fell for a third straight week, while refined product stockpiles also likely declined, a Reuters poll showed.
Iraqi government forces and Iranian-trained Iraqi paramilitaries are "preparing a major attack" on Kurdish forces in the oil-rich region of Kirkuk and near Mosul in northern Iraq, the Kurdistan Regional Government (KRG) said.
Although an Iraqi military spokesman denied any attack, John Kilduff, a partner at Again Capital LLC, said "worries over Kurdistan are helping...get us back over 51."
Monroe Energy, a subsidiary of Delta Air Lines Inc <DAL.N>, was shutting its 185,000 barrel-per-day Trainer, Pennsylvania, refinery due to a fire on Wednesday, a source familiar with the plant's operations said.
News of the outage sent U.S. gasoline margins <RBc1-CLc1> up as much as 4.4 percent to a session high of $16.62 a barrel.