Oil prices extended a sharp rally to within reach of $62 a barrel today after a steep fall in US crude oil inventories and more signs that Opec is committed to cuts.
US light crude was up 21 cents at $61.61 a barrel earlier today, rising for a third day after a 3.5 per cent surge the day before, the market's sharpest one-day gain in seven months.
London Brent crude was up 13 cents at $62.18 a barrel. Prices spiked to their highest since October 2nd yesterday after US data showed that crude stocks fell 3.3 million barrels last week, contrary to forecasts of a rise.
The drop in crude inventories in the world's largest oil consumer was due to the closure of the Louisiana Offshore Oil Port, the largest US oil import facility, for three days due to bad weather last week. Distillate stocks were also lower than forecast, falling 1.4 million barrels, the data showed.
More evidence of Opec's resolve to make good its pledge to cut 1.2 million barrels per day of production has also helped prices recover from a 2006 low of $56.55 a barrel last week, when traders questioned some Opec members' willingness to cut.
An Iranian official said yesterday that it had informed customers it would be cutting November supplies by 176,000 bpd, while a Nigerian official said the country would extend the 5 per cent curbs it imposed voluntarily this month into November.