Oil prices were on pace to post their best day in two weeks on Wednesday, after Saudi Arabia said it would cut oil exports in November, while a big chunk of U.S. offshore production remained offline.
Oil prices edged up on Wednesday, extending 2 percent gains recorded the previous day, on signs that markets are gradually tightening after years of oversupply, although the outlook for 2018 remained less certain.
U.S. West Texas Intermediate crude surged $1.34, or 2.7 percent, to $50.92, marking the biggest one-day run-up since Sept. 25. It touched a session high of $51.06 on Wednesday.
Factoring in Monday’s 29-cents jump, WTI had wiped out much of last week’s 4.6 percent decline.
Brent has so far averaged $52.7 per barrel this year. By the end of the year, Barclays said it expected Brent to have averaged around $53 per barrel.
Traders were focused on news that Saudi Arabia will cut its November crude oil allocations to customers by 560,000 barrels a day, according to Andrew Lipow, president of Lipow Oil Associates.
Nearly 59% of Gulf of Mexico oil production remains shut in as of Tuesday, according to the Bureau of Safety and Environmental Enforcement, following the storm formerly known as Hurricane Nate, which passed through the Gulf over the weekend.
WTI last month posted its best monthly gain since April 2016 after OPEC.