Investing.com - Oil prices edged higher during European morning hours on Tuesday, bouncing back from the prior session's losses amid ongoing signs that major oil producers are sticking to their pledge to cut back output.
Iraq's oil minister said on Monday that most oil majors working on its territory were participating in oil output reductions agreed as part of the deal between OPEC and non-OPEC producers to help to balance the market.
Brent oil for March delivery on the ICE Futures Exchange in London rose 53 cents, or about 1%, to $55.75 a barrel by 3:10AM ET (08:10GMT), after falling 26 cents, or around 0.5%, a day earlier.
Elsewhere, crude oil for March delivery on the New York Mercantile Exchange tacked on 45 cents, or nearly 0.9%, to $53.22 a barrel.
The U.S. benchmark slumped 47 cents, or 0.9%, on Monday as prospects of rising U.S. production weighed on the market.
According to oilfield services provider Baker Hughes, the number of rigs drilling for oil in the U.S. last week jumped by 29 to 551, the biggest one-week increase in nearly four years.
U.S. drilling activity has risen by more than 6% since mid-2016, taking it back to levels seen in late 2014, when strong U.S. crude output contributed to a collapse in oil prices.
The data raised concerns that the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand.
OPEC and non-OPEC countries have made a strong start to lowering their oil output under the first such pact in more than a decade, energy ministers said over the weekend as producers look to reduce oversupply and support prices.
Ministers said that 1.5 million barrels a day of the roughly 1.8 million in cuts pledged by OPEC and non-OPEC countries have already been taken out of the market.
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 to 32.5 million for the next six months.
The deal, if carried out as planned, should reduce global supply by about 2%.
Futures have been trading in a narrow range around the low $50s over the past month as sentiment in oil markets has been torn between expectations of a rebound in U.S. shale production and hopes that oversupply may be curbed by output cuts announced by major global producers.
Elsewhere on Nymex, gasoline futures for February ticked up 0.5 cents, or 0.4% to $1.580 a gallon, while February heating oil added 0.8 cents, or 0.5%, to $1.634 a gallon.
Natural gas futures for March delivery rose 2.3 cents, or 0.7%, to $3.281 per million British thermal units.