Investing.com - Oil prices edged higher during European morning hours on Tuesday, climbing towards the strongest levels since early January amid ongoing signs of compliance with a global pact to cut production.
Brent oil for April delivery on the ICE Futures Exchange in London tacked on 44 cents, or about 0.8%, to $56.62 a barrel by 4:10AM ET (09:10GMT), after gaining 37 cents, or around 0.7%, a day earlier.
Elsewhere, crude oil for April delivery on the New York Mercantile Exchange rose to a session high of $54.29 a barrel. It was last at $54.24, up 46 cents, or almost 0.9%.
There was no settlement in NYMEX oil prices on Monday, due to the President’s Day holiday in the U.S.
Market players extended their bullish bets on oil to an all-time high last week as OPEC and non-OPEC countries made a strong start to lowering their oil output under the first such pact in more than a decade.
Latest data showed the group’s production in January declined by 890,000 barrels a day from the previous month to 32.14 million barrels a day. The drop indicates a 90% compliance level so far by producers who had agreed to curtail their output.
January 1 marked the official start of the deal agreed by OPEC and non-OPEC member countries such as Russia in November last year to reduce output by almost 1.8 million barrels per day to 32.5 million for the next six months.
OPEC could extend its oil supply-reduction pact with non-members or even apply deeper cuts from July if global crude inventories fail to drop to a targeted level, OPEC sources said last week.
Futures have been trading in a narrow range around the lower-to-mid-$50s over the past two months as sentiment in oil markets has been torn between hopes that oversupply may be curbed by output cuts announced by major global producers and expectations of a rebound in U.S. shale production.
Data from oilfield services provider Baker Hughes on Friday revealed that the number of active U.S. rigs drilling for oil rose by six last week, the fifth weekly increase in a row.
That brought the total count to 597, the most since November 2015, raising concerns that the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand.
Elsewhere on Nymex, gasoline futures for March inched up 0.5 cents, or 0.4%, to $1.510 a gallon, while March heating oil added 1.1 cents ,or 0.7%, to $1.647 a gallon.
Natural gas futures for April delivery sank 7.3 cents, or 2.5%, to $2.878 per million British thermal units, as forecasts continued to call for mostly warmer-than-normal weather in key regions across the U.S. for the rest of the winter.