Oil prices firmed on Wednesday after a reported fall in US crude inventories and on expectations that an OPEC-led production cut aimed at tightening the market will be extended beyond March 2018.
Brent crude futures, the international benchmark for oil prices, were at $62.81 per barrel at 0112 GMT, up 24 cents, or 0.4 per cent, from their last close.
US West Texas Intermediate (WTI) crude futures were at $57.31 a barrel, up 48 cents, or 0.8 per cent.
Traders said markets were generally well supported by an effort led by the Organization of the Petroleum Exporting Countries (OPEC) and a group of non-OPEC producers led by Russia to restrain output in a bid to end a global supply overhang.
The deal to curb output is due to expire in March 2018, but OPEC will meet on Nov. 30 to discuss the outlook for the policy.
"All eyes remain focused on the OPEC's flux and reflux heading to Vienna as the meeting's outcome will ultimately determine oil prices' near-term fate," said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA.
J.P. Morgan said in its 2018 commodities outlook, released late on Tuesday, that "oil markets in 2018 will be balanced on the back of extended OPEC-NOPEC production cuts," but added that without extended cuts "markets will be in surplus."
The US bank said "we expect Brent to trade at the top of the $40 to $60 per barrel range, with Brent averaging $58 per barrel in 2018. WTI is expected to average $54.6 per barrel."
Traders said there was also some price support from a weekly report on Tuesday by the American Petroleum Institute which said US crude inventories fell by 6.4 million barrels in the week to Nov. 17.
Despite this, traders said crude markets were somewhat capped by rising production in the United States, which has jumped by almost 15 per cent since mid-2016 to 9.65 million barrels per day.
"While an extension of the OPEC deal to limit production may inspire oil bulls short-term, the rising US output is likely to present headwinds, ultimately limiting upside gains," said Lukman Otunuga, analyst at futures brokerage FXTM.
The latest official US production and inventory data is scheduled for release later on Wednesday.
