Oil prices jumped more than $1 a barrel on Thursday on news that key OPEC members were cutting production as promised and on forecasts of strong demand growth in China.
Brent crude oil LCOc1 rose $1.33 a barrel to a high of $56.43 before easing slightly to trade around $56.20 by 1445 GMT (9:45 a.m. ET). U.S. light crude CLc1 was up $1.05 a barrel at $53.30.
The Organization of the Petroleum Exporting Countries agreed in November to cut production to try to reduce a supply glut that has depressed prices for more than two years.
Several OPEC members appear to be implementing the deal.
“All the focus is now on OPEC compliance, which seems to be moving ahead as planned,” said Bjarne Schieldrop, chief commodities analyst at SEB Markets in Oslo.
Saudi Energy Minister Khalid al-Falih said on Thursday the kingdom had cut production to its lowest in almost two years, a move that would help accelerate a rebalancing of the global oil market.
“The market first of all is extremely healthy,” Falih told a conference in Abu Dhabi, adding that global demand for oil would grow by well over 1 million barrels per day (bpd) in 2017 and the market would tighten in two to three years.
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