LONDON – Oil prices leapt more than 3 percent to over $61 Wednesday after other OPEC members followed Saudi Arabia's lead in enforcing output cuts and U.S. fuel stocks unexpectedly fell.
Prices also drew strength from news of fresh strife in Nigeria, where militant unrest has shut in more than a quarter of the OPEC member's production capacity.
U.S. light crude settled up $2.05, or 3.45 percent, to $61.40 a barrel. London Brent was $2.19 higher at $62.05 a barrel.
U.S. crude had already risen 54 cents Tuesday after Abu Dhabi's state oil firm told major customers it would cut crude exports by about 5 percent in November.
On Wednesday, an Iranian official said Iran had also informed customers it was cutting supplies by 176,000 barrels per day (bpd) in November.
A Nigerian official said its national oil company would maintain a 5 percent output cut in November after a voluntary 5 percent cut to October supplies.
Nigeria's production has also been disrupted by militant attacks and on Wednesday oil company sources said villagers had invaded four pumping stations in Nigeria's southern Delta.
It was not immediately clear how much impact the invasion had had on oil supplies.
US INVENTORIES FALL
Even without OPEC supply curbs, U.S. oil imports fell last week causing U.S. crude inventories to fall by 3.3 million barrels, according to U.S. government data released on Wednesday, above analyst expectations.
At the same time, distillate stocks, including heating oil, fell by 1.4 million barrels, compared with the 1.1 million barrel decline forecast.
Gasoline inventories, which had been expected to decrease by 600,000 barrels, dropped by 2.8 million barrels.
Doubts OPEC would abide by its agreement helped to push U.S. crude down to $56.55 a barrel last week, the lowest level this year.
Some analysts still say OPEC has yet to prove its determination, but others said the producer group had gained experience in how to stave off any price collapse that it would now put to good use.
"They have learnt a considerable amount in the last few years about micro-managing the market," said John Waterlow of Wood Mackenzie consultancy.
OPEC's success in shoring up the market could also depend on the weather.
Temperatures in the U.S. Northeast, the biggest oil consuming region in the world, will be colder than usual and higher heating demand was expected over the next five days, U.S. based private forecaster Meteorlogix said on Tuesday.
Private WSI Corp on Monday predicted warmer-than-normal Northeast temperatures in November, but said they would be followed by cooler weather in December and January.