Investing.com - Oil prices rose sharply on Thursday, with traders encouraged by signs that major crude producers will adhere to their pledge to curb output.
Brent oil for March delivery on the ICE Futures Exchange in London jumped $1.01, or 1.8%, to $56.12 a barrel by 8:45AM ET (13:45GMT), after rallying $1.46, or 2.7%, on Wednesday.
Elsewhere, crude oil for February delivery on the New York Mercantile Exchange added 85 cents, or around 1.6%, to $53.10 a barrel. U.S. crude prices spiked $1.43, or 2.85, a day earlier.
Speaking at a conference in Abu Dhabi on Thursday, Saudi Arabian Energy Minister Khalid al-Falih said the kingdom has reduced output to less than 10 million barrels a day, going beyond its obligations under a deal between OPEC and other producers.
The comments came after Kuwaiti Oil Minister Essam Al-Marzouq told the conference his country has cut output by 133,000 barrels a day to 2.7 million barrels.
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.
The deal, if carried out as planned, should reduce global supply by about 2%.
However, some traders remain skeptical that the planned cuts will be as substantial as the market currently expects.
Oil received an additional boost from a broadly weaker U.S. dollar. The greenback sank after U.S. President-elect Donald Trump failed to offer details on his promises to boost fiscal spending and cut taxes at his first post-election press conference on Wednesday.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell to a one-month low of 100.70 in early trade. It was last down 0.7% at 101.00, pulling further away from last week's 14-year high of 103.82.
Oil prices typically strengthen when the U.S. currency weakens as the dollar-priced commodity becomes cheaper for holders of other currencies.
Elsewhere on Nymex, gasoline futures for February ticked up 1.8 cents, or 1.1% to $1.617 a gallon, while February heating oil tacked on 2.7 cents, or 1.7%, to $1.680 a gallon.
Natural gas futures for February delivery jumped 10.5 cents, or 3.3%, to $3.328 per million British thermal units.
Market participants looked ahead to weekly storage data due at 10:30ET (15:30GMT), which is expected to show a draw of 144 billion cubic feet in the week ended January 6.
That compares with a withdrawal of 49 billion cubic feet in the preceding week, 168 billion a year earlier and a five-year average drop of 167 billion cubic feet.