OPEC along with other producers including Russia agreed to cut production effective 1 January. Credit: brotherlywalks.

Oil prices have increased more than 1% after a report released by the Organization of the Petroleum Exporting Countries (OPEC) highlighted a decrease in production last month.

International Brent crude oil futures LCOc1 rose 1.01% at $61.80 a barrel, while US West Texas Intermediate (WTI) crude futures CLc1 increased 1.09% at $52.64 a barrel, Reuters reported.

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Last year, the oil cartel and other producers, including Russia, agreed to reduce production as of 1 January to avoid oversupply.

“Oil production growth in the US, combined with a weakening global economy, will put oil prices under pressure.”

The monthly report released by OPEC showed a strong start last month even before the agreement went into effect.

A US-based think tank predicted that the country may grant waivers on sanctions imposed by it on importing Iranian oil to fewer countries, signalling that global supply could tighten further.

China, India, Japan, South Korea and Turkey are expected to receive extended waivers while Italy, Greece and Taiwan are likely to be removed, political risk advisory Eurasia Group said.

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The news agency quoted investment bank Jefferies as saying: “The combination of production cuts by OPEC+ (especially the Saudis) and tightening sanctions on Iranian oil exports have brought the market close to balance.”

According to the International Energy Agency, oil production growth in the US, combined with a weakening global economy, will put oil prices under pressure.

Markets were also buoyed by signs that the US and China may soon put an end to their trade dispute during talks scheduled for 30 January.

As reported by the Wall Street Journal, Washington was considering lifting some or all tariffs that are imposed on Chinese imports.