Investing.com - Oil prices rallied sharply during North American morning hours on Tuesday, with the U.S. benchmark hitting its strongest levels since early January following bullish comments from OPEC Secretary General Mohammed Barkindo.
Speaking at the International Petroleum Week conference in London, Barkindo estimated that OPEC member states are about 90% in compliance with a global pact to cut production and noted the willingness of non-OPEC members to comply with the deal.
He expressed confidence in a higher level of compliance in the coming months from both OPEC and non-OPEC producers.
Barkindo added that a technical committee to monitor compliance with the agreement is expected to convene in Vienna on Wednesday.
Crude oil for April delivery on the New York Mercantile Exchange rose to a session high of $54.85 a barrel, a level not seen since January 3.
It was last at $54.67 by 6:55AM ET (11:55GMT), up 89 cents, or almost 1.7%. There was no settlement in NYMEX oil prices on Monday, due to the President’s Day holiday in the U.S.
Elsewhere, Brent oil for April delivery on the ICE Futures Exchange in London added 85 cents, or about 1.5%, to $57.03 a barrel, after rising to $57.31 earlier, the most since February 2. The global benchmark gained 37 cents, or around 0.7%, a day earlier.
Hedge funds extended their bullish bets on oil to an all-time high last week as OPEC and non-OPEC countries made a strong start to lowering their oil output under the first such pact in more than a decade.
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.
Futures have been trading in a narrow $5 range around the lower-to-mid-$50s over the past two months as sentiment in oil markets has been torn between hopes that oversupply may be curbed by output cuts announced by major global producers and expectations of a rebound in U.S. shale production.
Data from oilfield services provider Baker Hughes on Friday revealed that the number of active U.S. rigs drilling for oil rose by six last week, the fifth weekly increase in a row.
That brought the total count to 597, the most since November 2015, raising concerns that the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand.