API inventories rose more than expected last week, and U.S. crude gains narrowed to remain at seven-year highs

On Tuesday (October 26), U.
S.
oil rose nearly 1%, maintaining its highest level since 2014, helped by global supply shortages and strong demand from the United States, the world's largest oil consumer; Brent oil rose $0.
26, or 0.
31 percent, to close at $85.
43 a barrel
.

The decline in Cushing inventories in recent weeks has led to large swings in futures spreads, with traders paying a premium for spot
.
Analysts expect Cushing supply to fall
again this week amid falling U.
S.
production, drilling pauses and increased demand.
Phil Flynn, senior market analyst at Price Futures Group Inc.
, said oil prices continued to rise
on concerns that inventories fell below what is needed to maintain minimum operations.
Refiners are "digesting Cushing" stocks at an incredible rate, and "inventories are nearing emptying.
"

Energy analyst Vincent Piazza expects downstream demand to remain strong, which will also boost crude consumption, while domestic U.
S.
oil production is likely to remain resilient
supported by fracking crews and rigs.
In the week ending October 22, downstream utilization trends are set to continue, with crude oil product supply (a proxy for demand across the energy value chain) higher than a year earlier, and refining margins for gasoline picking up
.
A tighter supply-demand balance is pushing domestic crude into export markets, and this is likely to continue as operators try to replenish demand
ahead of winter.

OPEC and its allies are scheduled to meet next week to review output policy
.
Nigeria joined Saudi Arabia this week in saying it must resist pressure to accelerate production increases until the coronavirus pandemic is over
.
Louise Dickson, senior oil market analyst at Rystad Energy, said: "The energy crisis is still far from subsiding, so we expect oil prices to remain dominated by strength in November and December as supply lags demand and OPEC+ alliance of OPEC and its allies remain on the sidelines
.
"

A number of Wall Street giants warned at an investment conference in Riyadh on Monday that the risk of continued oil prices rising was high, with BlackRock, the world's largest asset manager, saying the probability of oil touching $100 a barrel was "high.
"
Goldman Sachs predicted that a strong rebound in global oil demand could push Brent above its year-end target of $90 a barrel
.

Traders are also closely watching talks around reviving the Iran nuclear deal, which could eventually be revived to allow the country to increase crude exports
.
U.
S.
National Security Adviser Jake Sullivan said President Joe Biden will travel to Europe this week for a G20 summit to discuss issues such as
energy prices, Iran's nuclear program and supply chains.
Will focus on supply chains and energy prices, knowing that these issues will affect working families
in the United States.