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Oil extended gains as Opec says all ottions open to re-balance

Hong Kong - Oil extended gains as the Organisation of Petroleum Exporting Countries (Opec) and its allies reiterated that all options are open to re-balance the market.

December futures increased as much as 0.8% in New York. Opec and its partners including Russia achieved a record-high level of compliance to output cuts during September, according to a statement Saturday from the committee responsible for monitoring the agreement.

In the US, drillers reduced the rig count a third week to the lowest since June, according to Baker Hughes.

Oil is holding gains near $52 a barrel on speculation Opec will decide to extend supply curbs past the end of March when it meets in Vienna on November 30.

Geopolitical tensions in Iraq have also helped to support prices the past week, with Iraqi forces regaining control of Zummar town where Batma and Ain Zala fields are located.

"The key driver is the discussion about extending the Opec, Russia production agreement against a background of pretty good compliance," said Ric Spooner, an analyst at CMC Markets in Sydney.

"The fact that US production has not picked up noticeably in recent times is also helping. It’s possible that oil could inch a little higher, maybe up toward $54."

West Texas Intermediate for December delivery advanced as much as 40 cents to $52.24 a barrel on the New York Mercantile Exchange, and was at $51.99 at 7:56am in London. Total volume traded was about 52% below the 100-day average.

The November contract expired on Friday after gaining 0.4% to $51.47, ending the week little changed.

Brent for December settlement added as much as 30 cents, to $58.05 a barrel on the London-based ICE Futures Europe exchange. Prices rose 1% last week, climbing for a second week. The global benchmark crude traded at a premium of $5.85 to WTI.

Compliance to the OPEC-led cuts was 120 percent last month, according to the Joint Ministerial Monitoring Committee. Commercial oil stocks in the Organisation for Economic Cooperation and Development countries fell further in the month and now stand at 159 million barrels above their latest five-year average, the JMMC said.

Oil-market news:

Secretary of State Rex Tillerson called on European governments to join US-led sanctions against Iran’s Revolutionary Guard Corps, saying that countries doing business with the nation’s force do so at their own risk.

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