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by Stockwatch Business Reporter

West Texas Intermediate crude for December delivery added $2.88 to $102.78, while Brent for December added $1.44 to $115.32 (all figures in this para U.S.). Western Canadian Select traded at a discount of $36.20 to WTI, down from a discount of $29.70. Natural gas for November added 12 cents to $2.81. The TSX energy index added 5.38 points to close at 486.46.

Oil prices rose as Houthi militants claimed to have struck Saudi Arabia's Ras Tanura refinery with a ballistic missile, reigniting regional supply concerns. Prices are likely to stay high in the coming months, according to UBS. Citing the "unpredictable nature of the Middle East conflict and the pace of recovery in Gulf production and global oil demand," the bank hiked its year-end Brent forecast to $110 (U.S.) from $100 (U.S.). It also increased next year's March, June and September forecasts by $5 (U.S.) each, to $95 (U.S.), $90 (U.S.) and $85 (U.S.), respectively.

Meanwhile, the U.S. Energy Information Administration (EIA) said U.S. commercial crude stocks fell by 1.9 million barrels last week. Analysts were expecting a slight increase of 15,000 barrels. At 410.6 million barrels, these inventories are now 4 per cent below the five-year average. (Distillate inventories, whose 1.5-million-barrel decrease last week exceeded the 900,000-barrel drop predicted by analysts, are 10 per cent below the five-year average.) These figures exclude the Strategic Petroleum Reserve, which shed 100,000 barrels last week and now sits at 282.6 million, its lowest since 1982. The reserve fell below 300 million barrels in August for the first time since 1983 and has since hit a new low every week.

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