Oil prices soared on Tuesday, January 31, after news that Organization of Petroleum Exporting Countries, OPEC, oil production has dipped by more than 1 million bpd this month.
This is a pointer to a strong start by the exporter group in implementing its first supply cut deal in eight years.
A Reuters survey showed on Tuesday crude oil supply from the 11 OPEC members with production targets averaged 30.01 million barrels per day (bpd) in January, versus 31.17 million in December.
Overall, the Organization of the Petroleum Exporting Countries, OPEC, achieved 82 percent compliance with its promised production cuts, well above most market forecasts.
Compliance comfortably exceeds the initial 60 percent achieved when a similar deal was implemented in 2009, and the survey adds to indications that adherence so far has been high.
Brent crude oil was up 48 cents a barrel at $55.71 by 9:15 a.m. ET (1415 GMT). U.S. light crude rose 53 cents a barrel at $53.16.
Both benchmarks have traded within fairly narrow ranges over the last two months, since the Organization of the Petroleum Exporting Countries agreed to cut output by almost 1.8 barrel per day (bpd) in an attempt to clear a global glut.
After an initial price rise on hopes that markets would rebalance quickly, Brent and U.S. crude futures have both been held back by evidence of higher U.S. oil drilling and forecasts of a rebound in shale production.
U.S. shale output is slowly increasing, helping keep a lid on prices. Brent has been close to $55 a barrel and U.S. crude not far from $52.50 for most of January.