Crude oil prices edged up for a fourth consecutive session on Wednesday, close to their peaks since mid-2015, with the market awaiting evidence of OPEC supply reductions in the new year.
International Brent crude futures were up 12 cents at $56.21 a barrel by 1248 GMT (7:48 a.m. ET). Brent hit $57.89 on Dec. 12, its highest since July 2015.
U.S. benchmark West Texas Intermediate (WTI) crude oil prices were up 7 cents at $53.97 per barrel, not far from the year’s high of $54.51 reached on Dec. 12.
Oil prices have gained 25 percent since mid-November, helped by expectations for OPEC’s supply cut and solid U.S. economic figures that have also bolstered equity prices.
Trading is expected to remain thin this week ahead of the New Year holiday.
The market is taking a wait-and-see approach to the official start of the landmark deal reached by the Organization of the Petroleum Exporting Countries (OPEC) and several non-OPEC members to reduce their output. The deal is set to kick in from Jan. 1.
OPEC and non-OPEC producers are expected to lower production by almost 1.8 million barrels per day (bpd), with Saudi Arabia, OPEC’s largest producer, agreeing to bear the lion’s share of the cuts.
Iraqi Oil Minister Jabar Ali al-Luaibi said on Wednesday his country, which has seen fast production growth in the past two years, would cut supply by 200,000-210,000 bpd from January.
Luaibi said on a visit to fellow OPEC member Kuwait that he saw oil prices rising to $60 per barrel as the cuts would help ease the global glut of the past three years, according to Kuwait News Agency (KUNA).
“There are mixed expectations of the cuts, trading is thin so the first two weeks of January would be critical to watch,” said Michael McCarthy, chief market strategist at Sydney’s CMC Markets.
“If there’s any misstep or any indication of disagreement to (the deal), we would see crude prices dropping,” he said.
Iranian oil minister Bijan Zanganeh also said on Tuesday he expected OPEC to abide by the deal. “While competing, we do have engagement,” Iranian news agency Shana quoted him as saying.
OPEC member Venezuela also said it will cut 95,000 bpd of oil production in the new year.
Russian oil producer Gazprom Neft said it planned to boost oil output by 4.5% to 5% next year, less than it had intended before Russia, one of the non-OPEC member countries, joined a deal to cut supply.