The West Texas Intermediate for February delivery rose 1.6 USA dollars to settle at 52.11 dollars a barrel on the New York Mercantile Exchange, while Brent crude for March delivery increased 1.39 dollars to close at 60.38 dollars a barrel on the London ICE Futures Exchange.
West Texas Intermediate crude for February delivery rose $1.73 to settle at $53.80 a barrel on the New York Mercantile Exchange. It is expected, that during the current period of the cuts, until June 2019, OPEC and allies will remove a total of 1.195 million bpd off the market and keep production at 43.874 million bpd.
Saudi Arabia demonstrated its resolve to lift oil prices by slashing output ahead of the entry into force of new pact limiting production while Russian Federation boosted output to a record level, the International Energy Agency said Friday.
EIA expects crude oil prices to continue to rise in late 2019 and early 2020 because of an increase in refinery demand for light-sweet crude oil, which is the result of regulations from the International Maritime Organization that will limit the sulfur content in marine fuels used by ocean-going vessels. "The US, which is already the largest liquids producer, will become at the beginning of 2019 the largest crude oil producer before Russian Federation and Saudi Arabia thanks to its unconventional crudes".
Meanwhile, oversupply worries have eased as the Organization of the Petroleum Exporting Countries (OPEC) and other major crude exporters including Russian Federation agreed past year to cut supply starting this month to curb a global glut.More news: Ireland readies 'mega' no-deal Brexit legislation package
In the first half of 2019, OPEC+ countries will reduce oil production by 1.195 million barrels per day - to 43.874 million barrels.
Since the EIA report is positively correlated with API, the market will be trading crude oil with a bullish sentiment.
US oil prices settled higher on Wednesday. Whether prices will remain in a bull market largely depends on the impact of the 1.2 MMbpd in cuts pledged by major crude producers.
The IEA also reported that United States oil output will rise by 1.3 million bpd in 2019, though S&P Global Platts reported USA oil rigs dropping for the ninth consecutive week when Brent prices fell below $70 per barrel in mid-November 2018. Venezuela risks a fresh plunge in oil output, Barclays analysts said in a note. Analysts and traders credit progress in US-China trade talks, a more dovish stance on interest-rate hikes from the Federal Reserve and signs that Opec-led production cuts are starting to take a bite out of supplies.
After closing out 2018 in free-fall amid fears of a global supply glut and economic slowdown, United States crude prices have rebounded more than 18% to start this year.