Oil prices climbed more than 1.5 per cent this morning to the highest point so far this month ahead of Donald Trump's decision on whether to re-certify the Iran nuclear deal.
At the time of writing, Brent crude futures were up 1.74 per cent at $57.23 per barrel, while US benchmark West Texas Intermediate prices were up 1.58 per cent at $51.40 per barrel.
Last night, closely watched data from the Energy Information Administration showed US crude inventories dropped 2.7m barrels to 462.22m barrels in the week to 6 October. Meanwhile, US crude output fell 81,000 barrels per day (bpd) to 9.48m bpd.
Analysis from the International Energy Agency (IEA) yesterday forecast the global crude market will finally come into balance next year if the Organisation of the Petroleum Exporting Countries (Opec) keeps production at its current levels.
Opec and key non-members including Russia have agreed to cut output by 1.8m bpd to prop up oil prices and reduce the global supply glut. The deal runs until March 2018.
Oil prices were also bolstered by expectation-beating import data from China, the world's biggest importer of oil.
Chinese oil imports averaged 8.5m bpd from January to September and reached 9m bpd in September.
Traders will be watching the US today for President Donald Trump's decision on whether to continue to certify the 2015 Iran nuclear deal.
"If the President decertifies the Iranian nuclear deal (which was agreed with five other nations), it may create some knee-jerk reaction in the oil market," said Naeem Aslam, chief market analyst at Think Markets.
If he does not certify the deal, congress will have 60 days to decide whether to reimpose new sanctions.
Read more: Brent crude oil dips below $56 a barrel