The oil price hit a two-year high and moved above $61 per barrel Wednesday, on news OPEC member output cap compliance levels rose during October.
Data shows the price of crude oil rose some 7% during October, marking a fourth consecutive month of price gains for the valuable commodity.
At midday in the UK’s trading session, Brent Crude oil was at $61.49 per barrel, while Western Texas Intermediate, (WTI), was at $55.03 per barrel.
OPEC compliance rises
The main driver of Wednesdays gain, was news that compliance among OPEC members with the agreed output cap had risen.
Figures show oil output from OPEC members fell by 80,000 barrels per day, to a total of 32.78 million bpd, during October. That means OPEC member adherence to agreed supply cuts, rose to 92%, up from 86% in in September.
Non-OPEC member Russia, who is part of the output cap agreement, also appears to be continuing to adhere to the cap. Oil output from Russia during October was some 300,000 bpd lower than a year earlier, data shows.
News of greater adherence to the agreed output cap comes ahead of OPEC’s next meeting later in November. Expectations are growing that an agreement to extend the current cap to the end of 2018 could be announced.
US oil draw rise
The latest figures, published Tuesday, by the American Petroleum Institute, provided additional upward support to the oil price.
The API said there was a draw of 5.087 million barrels of oil during the week ended October 27. That was much larger than the expected draw of between 1.4 - 2.5 million. The report also showed a draw of 35.1 million barrels of crude oil inventories since the beginning of 2017.
A combination of activity and comments continue to work together to push the price of oil higher. And, as the current output cap appears to be proving a success, all eyes will be on the November 30th OPEC meeting in Vienna, for confirmation it will continue.