International Brent crude oil prices LCOc1 were trading up 31 cents (or 0.55 percent) at $57.13 a barrel on Tuesday – close to last year’s high of $57.89 per barrel hit on December 12.
Oil markets were closed on Monday after the New Year’s holiday.
US benchmark West Texas Intermediate (WTI) CLc1 crude oil prices were up 32 cents, or 0.6 percent, at $54.04, not far from last year’s high of $54.51 reached on December 12.
January 1 marked the official start of the deal agreed by the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC member countries such as Russia in November last year to reduce output by almost 1.8 million barrels per day.
Market watchers says January will serve as an indicator for whether the agreement will stick.
“Markets will be looking for anecdotal evidence for production cuts,” said Ric Spooner, chief market analyst at Sydney’s CMC Markets.
“The most likely scenario is OPEC and non-OPEC member countries will be committed to the deal, especially in early stages.”
Libya, one of two OPEC member countries exempt from cuts, increased its production to 685,000 barrels per day as of Sunday, up from around 600,000 a day in December, according to an official from the National Oil Corporation.
Elsewhere in OPEC, member country Oman told customers last week that it will cut its crude term allocation volumes by 5 percent in March. – Reuters