Oil prices marked higher on Wednesday on prospects that US crude inventories are falling and signs that oil producers will stick to decided output cuts that took effect this week.
Global standard Brent crude futures were up 10 cents at $55.57 a barrel by 1110 GMT. The contract stretched an 18-month high in the previous session, but a strong dollar has shaved off most of those advances. US West Texas Intermediate crude prospects were trading at $52.42 per barrel, up 9 cents.
“Positive equities and advances in industrial metals this morning, as well as expectations that US crude oil stocks will show a decline ingredients helping to drive a slight gain in Brent crude,” Bjarne Schieldrop , chief commodities analyst at SEB Markets in Oslo added.
Weekly US statistics on oil stocks are expected to display a 1.7-million-barrel draw on Thursday, analysts polled by Reuters said. Opec member Kuwait also raised expectations that producers will comply with a deal to decrease oversupply after its state-owned oil producer told on Wednesday it would cut output in the first quarter.
Associates of the Organization of the Petroleum Exporting Countries in November agreed their first output cut since 2008 in an attempt to stabilize oil prices. As part of the deal, Kuwait has to cut output by 131,000 barrels per day. An Opec committee meeting to observe compliance with the agreement is scheduled for Jan. 21-22 in Vienna.
“Prices are likely to continue volatile until there is evidence that quotas are being adhered to,” analysts at Cenkos Securities inscribed. Also imitating a tightening market, traders suppose top oil exporter Saudi Arabia to raise the official selling price for its crude to Asia in February.
Also reflecting a tightening market, traders suppose top oil exporter Saudi Arabia to increase the official selling price for its crude to Asia in February.