Investing.com - Oil prices slipped lower on Tuesday as investors took profits following a powerful rally that saw prices hit the highest levels since mid-2015 after major producers reached a deal to scale back output.
U.S. crude was trading at $52.57 a barrel at 10:34 ET, down 20 cents or 0.34% from its last close.
Global benchmark Brent futures were at $55.45 a barrel, down 24 cents or 0.43%.
Prices retreated from the highs hit on Monday as traders took profits after the strong gains, but the market remained broadly supported by the deal to cut output.
Over the weekend, the Organization of the Petroleum Exporting Countries and non-OPEC producers on reached their first deal since 2001 on coordinated production cuts.
Producers from outside OPEC agreed to cut output by 558,000 barrels per day from January 1, the largest ever output cut by non-OPEC nations.
Russia pledged to undertake the bulk of the cuts, reducing production by 300,000 bpd.
This was on top of a cut of 1.2 million bpd cut announced by OPEC on November 30.
The output cuts will come into effect on January 1 and the oil producers will reconvene in six months to assess the deal.
The total reduction represents almost 2% of global oil output.
Global oil inventories could start to draw in the first half of 2017 if OPEC and non-OPEC producers follow through on an agreement to cut output, the International Energy Agency said Tuesday.
The agency’s monthly oil market report also said global oil demand will rise more strongly than expected this year and next year.
It lifted its forecast for global oil demand growth this year by 120,000 bpd to 1.4 million bpd and its forecast for 2017 by 110,000 bpd to 1.3 million bpd.
Oil production has been outstripping consumption by between one to two million barrels per day since late 2014, pressuring prices lower.