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. Last Updated: 07/27/2016

Oil Prices' Rebound Moves Up a Notch

LONDON -- Roller-coaster oil prices' latest rebound moved up a gear on Tuesday as buyers gradually purged memories of last week's spectacular sell-off.

Benchmark North Sea Brent crude for November delivery was trading 49 cents higher at $21.72 a barrel by mid-morning, building on Monday's gain of more than 50 cents.

The renewed upswing has repaired damage sustained last week when heavy selling from speculative funds took Brent $4 down in London from a recent 33-month high of $24.30 a barrel.

In New York, crude prices peaked two weeks ago at a 33-month high of $25.12 per barrel, then tumbled to $20.90 late Friday in their largest single-day loss since the end of the Persian Gulf War. November contracts for U.S. benchmark West Texas Intermediate closed higher Monday at $21.27 per barrel.

"There has been good buying all round. Trade, locals and speculators are buying into this bounce," a London dealer said Tuesday.

Renewed gains have breathed fresh life into an eight-month-old rally from sub-$10 lows powered by OPEC output curbs and recovering global demand.

Worries about signs of overproduction by the Organization of Petroleum Exporting Countries triggered last week's sell-off, as funds seized the chance to take profits amassed during this year's gains.

Some analysts say the decline merely sets the stage for another move higher again as the market enters the northern hemisphere winter, the industry's key heating-oil demand season.

Key exporters Iran and Saudi Arabia have sought to calm market nerves by reasserting that the OPEC cartel would continue to comply with its self-imposed output limits.

OPEC has already committed to keeping the supply curbs until March 2000, and Saudi Arabia has now hinted that they may be left in place even longer if conditions warranted.

Middle East oil sources said Tuesday that oil ministers of OPEC giants Saudi Arabia and Iran are likely to meet in Iran in early November.

One of the sources said Iran had invited Saudi Oil Minister Ali al-Naimi to a gas conference on Nov. 7 and 8 that would provide him with an opportunity to talk with his Iranian counterpart, Bijan Zanganeh.

The sources said Naimi and Zanganeh would also likely discuss the level of oil stockpiles, a crucial factor in determining OPEC's future production decisions.

The International Energy Agency, the Western oil watchdog, warned Monday that surplus world oil stockpiles were falling more slowly than expected despite the tough OPEC curbs.

David Knapp, the economist who edited the IEA's latest report, said the biggest surprise was that oil inventories in industrialized countries actually increased from June to September.

Some industry analysts challenged the IEA's data, calling it puzzling and inconsistent. Peter Hitchens of London brokerage Williams De Broe said the IEA's finding on oil inventories was a "glaring error," and he noted alternative surveys that showed decreases in oil stockpiles in the United States, Europe and Japan.