Oil prices rise as markets eye Opec, non-Opec production cuts
[SEOUL] Oil prices rose in the first trading hours of 2017, buoyed by hopes that a deal between Opec and non-Opec members to cut production, which kicked in on Sunday, will be effective in draining a global supply glut.
International Brent crude oil prices were up 16 cents, or 0.3 per cent, at US$56.98 a barrel at 0802 GMT on Tuesday - close to last year's high of US$57.89 per barrel, hit on Dec 12. Oil markets were closed on Monday after the New Year's holiday.
US benchmark West Texas Intermediate (WTI) crude oil prices were up 22 cents, or 0.41 per cent, at US$53.94 a barrel, not far from last year's high of US$54.51 reached on Dec. 12.
Jan 1 marked the official start of the deal agreed by the Organization 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 said 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 (bpd) as of Sunday, up from around 600,000 a day in December, according to an official from the National Oil Corporation (NOC).
Elsewhere, non-Opec Middle Eastern oil producer Oman told customers last week that it will cut its crude term allocation volumes by 5 per cent in March.
Non-Opec member Russia's oil production in December remained unchanged at 11.21 million bpd, still near a 30-year high, but it was preparing to cut output by 300,000 bpd in the first half of 2017 in its contribution to the production cut accord.
REUTERS
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Energy & Commodities
Sri Lanka approves power deal with India's Adani Group
BP profits drop to US$2.7 billion, refinery outage offsets higher output
Aramco to pay US$31 billion dividend as Saudi posts budget deficit
PetroVietnam announces new oil discoveries with initial reserves of 100.5 million barrels
European oil giants consider shifting their listings to the US
ExxonMobil sees Hess arbitration dragging into 2025, CEO says