Nearby by crude oil prices rose last week to their highest level in more than two years, bolstered by rising global demand and physical prices and increased expectations that OPEC and other producing countries will extend a deal to cut production.

For the week, December West Texas Intermediate crude oil futures settled at $55.64, up $1.74 or +3.23% and January Brent crude oil finished the week at $62.07, up $1.94 or +3.23%.

Brent is up 38 percent since its low in 2017 was hit in June. WTI is 30 percent from its June bottom.

Despite expectations for a higher weekly close, we did see some weakness at times last week. This price action was fueled by a surge in U.S. crude exports to an all-time high and as American drillers pumped near record levels.

The Energy Information Administration’s weekly inventories report showed U.S. crude stocks decreased by 2.4 million barrels during the week-ending October 27. That was better than the 1.8 million barrel estimate, but well short of the American Petroleum Institute’s 5.1 million barrel decline reported on Tuesday.

New data showed the United States exported 2.13 million barrels a day of oil in the week through October 27, the first time the nation has crossed the 2 million-barrels-per-day mark.

In other news, total U.S. crude production came in at 9.55 million barrels a day, just short of the September 29 high going back to July 10, 2015.

News of rising demand was supportive. China’s oil demand growth appears to be accelerating with the country importing roughly 9 million barrels per day, surpassing the United States as the world’s biggest crude importer.

Forecast

Expectations that we’re going to see the production cut extended and robust demand should continue to provide support. The global economy is looking good and China’s oil demand growth appears to be accelerating.

Physical oil prices are also climbing with Saudi Aramco, the UAE’s ADNOC and Qatar Petroleum, raising prices for Asian buyers. Additionally, Aramco’s December premium is trading over the average of the Oman and Dubai benchmarks. This puts it at a three year high.

Prices could get an additional boost this week due to another drop in the number of U.S. oil rigs. According to energy services firm Baker Hughes, oil rigs fell by 8 to 729.

Traders will be also watching the ongoing financial troubles in OPEC-member Venezuela.

The tone is expected to continue to remain bullish over the near-term since the OPEC meeting at which the production cut extension should be announced is not going to be held until November 30. This gives speculators plenty of time to drive prices higher.