Oil prices climbed on Tuesday, January 10, on hopes that some planned output cuts agreed by the Organisation of Petroleum Exporting Countries, OPEC, and other producers would be implemented.
Brent crude futures LCOc1, the international benchmark for oil prices, were trading at $55.20 per barrel at 0827 GMT, up 25 cents, or 0.45 percent, from the previous close.
U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were trading at $52.222 per barrel, up 26 cents, or 0.5 percent.
Analysts said the gains on Tuesday came from expectations that some of the cuts planned by the Organization of the Petroleum Exporting Countries (OPEC), especially Saudi Arabia and Abu Dhabi, would materialise despite doubts over full implementation.
“Latest comments from OPEC members … suggest that members are making output adjustments to comply with agreed cuts,” Dutch bank ING said on Tuesday.
“Coordinated output cuts will support the market rebalancing that will draw down global stock levels, leading us to revise up our Brent crude forecast for 2017 to $57 per barrel,” BMI Research said.
Traders said that strong demand from India also supported prices. Fuel demand from the world’s third biggest oil consumer hit 16.53 million tonnes in December, up 4.3 percent from the same period last year.
Despite this, many analysts still saw a risk that overall production may not be reduced as envisaged, Reuters reports.
Crude plunged by around 4 percent in the previous session on concerns that rising output in Iran and also Iraq were undermining efforts to curb a global fuel supply glut that has weighed on markets for over two years.
The average Canadian rig count for December 2016 was 209, up 36 from the 173 counted in November 2016, and up 49 from the 160 counted in December 2015, said Matt Stanley, a fuel broker at Freight Services International in Dubai.
