MTECHTIPS:-Oil prices rise as markets eye production cuts

MTECHTIPS:-Oil prices rise as markets eye production cuts

MTECHTIPS- Oil prices rose on Tuesday, the first trading day of 2017, buoyed by hopes that a deal between OPEC and non-OPEC members to cut production, which kicked in on Sunday, will drain a global supply glut. Benchmark North Sea Brent crude (LCOc 1) was up 40 cents at $57.22 a barrel by 0845 GMT (3.45 a.m. ET), not far below the 2016 high of $57.89, reached on Dec. 12. U.S. light crude oil (CLc1) was up 40 cents at $54.12 a barrel. Oil futures markets were closed on Monday for New Year public holidays. Jan. 1 marked the official start of a deal agreed by the Organization of the Petroleum Exporting Countries and other exporters such as Russia to reduce output by almost 1.8 million barrels per day (bpd). “First signals suggest the OPEC and non-OPEC production cuts are raising hopes that the global oil oversupply will diminish,” said Hans van Cleef, senior energy economist at ABN AMRO (AS:ABNd) Bank N.V. in Amsterdam. Ric Spooner, chief market analyst at CMC Markets, agreed: “Markets will be looking for anecdotal evidence for production cuts,” he said. “The most likely scenario is OPEC and non-OPEC member countries will be committed to the deal, especially in early stages.” Libya, one of two OPEC countries exempt from the output cuts, has increased its production to 685,000 bpd, from around 600,000 bpd in December, an official at the National Oil Corporation said on Sunday.

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