U.S. oil prices maintain near seven-week highs after OPEC indicated optimism over its deal with other oil producers to restrain production and reduce an oversupply that has weighed down on the market since 2014.
The U.S. April crude contract rose 3 cents at $54.36 per barrel. The March contract expired up 1.2 percent or up 66 cents at $54.06 on Tuesday.
After closing on the previous session up 0.9 percent or 48 cents at $56.66 per barrel, Brent crude has still yet to trade. Earlier, it touched $57.31, its highest since February 2.
The Organization of the Petroleum Exporting Countries along with other oil producers outside of the group agreed in November to decrease output by around 1.8 million barrels per day (bpd) in order to offset an oversupply that has weighed down prices for over two years.
OPEC Secretary General Mohammad Barkindo told an industry conference in London that data from January revealed that compliance from countries that are participating in the output cut had been more than 90 percent. Oil inventories would lower even more this year, he added.
Barkindo said “All countries involved remain resolute in the determination to achieve a higher level of conformity.”
So far, Russia and other non-OPEC producers accounted for a small percentage of the cuts, but according to Barkindo, this would eventually increase.
Barkindo stated that it was too early to say if the output cat, which lasts for six months from January 1m would need to be extended or deepened at the next OPEC meeting in May.