Oil hits 4-month highs as OPEC keeps talks of cuts in focus

Oil rose more than 1 percent to four-month highs on Oct. 6, spurred by another informal Organization of the Petroleum Exporting Countries meeting on output cuts and plunging U.S. crude inventories, with some saying the market has overshot itself with a near 15-percent gain in seven sessions.

Saudi, Iranian and Iraqi energy ministers will be among key OPEC representatives to meet non-OPEC member Russia on the sidelines of an energy conference next week in Istanbul, OPEC sources said.
Oil has gained more than $6 a barrel since OPEC announced at informal talks in Algeria on Sept. 28 that it hopes to reduce output to 32.5 million-33 million barrels per day. That would remove about 700,000 bpd from a global glut estimated by analysts at 1 million-1.5 million bpd.

On top of OPEC's pledged output cuts, prices were supported by the surprise drop in U.S. crude stocks for a fifth week in a row, bringing the total drawdown since the beginning of September to 26 million barrels, according to government data on Oct. 5.

Brent crude settled up 65 cents, or 1.3 percent, at $52.51 a barrel. It rose earlier to $52.65, its highest since June 9.

U.S. West Texas Intermediate crude closed up 61 cents, or 1.2 percent, at $50.44. It was WTI's first settlement above $50 since June 24.

The Relative Strength Index for both benchmarks were at 69 -- just below the 70 level for a technically overbought market.

Earlier on Oct. 6, prices pared gains briefly after energy monitoring service Genscape reported a build of nearly 1 million barrels in stockpiles at the Cushing, Oklahoma delivery base for WTI during the week to Oct 4.

"It's really crazy these markets," said Carsten Fritsch, commodities strategist for Commerzbank in...