New York: Oil posted its biggest quarterly gain in more than a year on forecasts for rising demand and Turkey’s threat to halt Kurdish crude exports.

Futures jumped 9.4 per cent in September and settled above $50 (Dh183.50) a barrel on Friday for the eighth straight session. Opec and the International Energy Agency this month boosted demand forecasts, signalling the surplus that has weighed on prices may shrink further. Iraq said Thursday that Turkey agreed to deal exclusively with the central government in Baghdad over exports of Kurdish crude, a step that could disrupt supplies.

“We’re playing a little bit of catch up,” said Bill O’Grady, chief market strategist at Confluence Investment Management LLC in St Louis. “World economic growth is actually pretty good, so that’s raising hopes for demand.”

Oil this week returned to a bull market on signs the persistent crude surplus was finally starting to shrink, while Trafigura Group and Citigroup Inc warned of a further supply squeeze in the next two years. The Organisation of Petroleum Exporting Countries and Russia have hailed the success of their agreement to curb supplies and urged allies to stay the course. The effects of Hurricane Harvey, which shut down a large number of refineries on the US Gulf Coast, have begun to fade.

Biggest gain

West Texas Intermediate for November delivery rose 11 cents to settle at $51.67 a barrel on the New York Mercantile Exchange. Prices advanced 12 per cent during the quarter, the biggest gain since the second quarter of 2016.

Brent for November settlement, which expired Friday, rose 13 cents to close at $57.54 on the London-based ICE Futures Europe exchange. The price increased 20 per cent during the quarter. The global benchmark crude traded at a premium of $5.87 to WTI.

With higher prices and brightening demand forecasts, US drillers have little incentive to scale back, said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund. US producers added six oil rigs this week, expanding activity for the first time in over a month, according to Baker Hughes.

“They’re all the more encouraged by $50 oil,” Kilduff said.