Crude oil prices increased as investors expect that the deal between OPEC and non-OPEC countries to reduce output will be able to end the global oversupply.
On the first working day of the new year, Benchmark North Sea Brent crude and US light crude oil gained 40 cents to reach $57.22 per barrel and $54.12 a barrel respectively, reported Reuters.
In November and December, OPEC and non-OPEC decided to reduce oil production to end the global oil glut.
Excess oil production caused prices to reduce to almost half of its 2014 level.
The deal between OPEC and non-OPEC has become effective from 1 January. It is expected that the deal would reduce oil production by approximately 1.8 million barrels per day.
CMC Markets chief market analyst Ric Spooner was quoted by the news agency as saying: “Markets will be looking for anecdotal evidence for production cuts. The most likely scenario is OPEC and non-OPEC member countries will be committed to the deal, especially in early stages.”
However, OPEC member Libya reportedly increased its oil production by 85,000bpd in December. Non-OPEC country Oman is expected to reduce its oil output by 5% from March.
Russia produced 11.21 million bpd in December. The country is a key non-OPEC oil exporting country. It agreed to reduce its output in the coming months by 300,000bpd under the deal.