Oil Rises To $56 As Middle East Producers Stick To Cuts

Oil prices traded close to five-month highs on Tuesday after fresh data showed key Middle Eastern producers continued to cut supply in line with an OPEC-led deal aimed at ending crude glut.

A weaker U.S. dollar also lent support to greenback-denominated commodities like oil, traders said.

Benchmark Brent crude futures were up towards a five-month high of 55.99 dollars.

U.S. West Texas Intermediate ( WTI ) crude futures were up 44 cents at 50.35 dollars per barrel.

Sentiment has been buoyed since last week when the International Energy Agency lifted its 2017 demand outlook and OPEC estimated the world would need more of its crude next year.

OPEC’s second-biggest producer Iraq said on Tuesday it had cut output by about 260,000 barrels per day (bpd), exceeding cuts agreed under the OPEC-led pact.

This comes a day after official export data showed Saudi Arabian July crude exports dropped to the lowest in three years, highlighting its own compliance with output restrictions.

However, rising crude prices have encouraged drilling in U.S. shale oil regions.

The U.S. government said on Monday it expected shale output to rise for a 10th straight month in October.

Traders also closely watched the progress of Hurricane Maria in the Caribbean.

Although it remains far from the U.S. oil production heartland in the Gulf of Mexico, it could dampen oil demand and disrupt maritime trading routes