By Christopher Johnson
LONDON (Reuters) - Oil prices rose more than $1 a barrel on Thursday on reports key OPEC members were starting to cut production as promised and on forecasts of strong demand growth in China.
Brent crude (LCOc1) rose $1.20 a barrel to a high of $56.30 before easing slightly to trade around $56.20 by 1330 GMT (8:30 a.m. ET). U.S. light crude (CLc1) was up 95 cents at $53.20.
The Organization of the Petroleum Exporting Countries agreed in November to cut oil production to try to reduce a global 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 Arabian Energy Minister Khalid al-Falih said on Thursday the OPEC deal would accelerate the rebalancing of the global oil market and that prices would respond later this year.
"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.
Kuwaiti Oil Minister Essam Al-Marzouq told the conference Kuwait had already cut its oil output by more than it promised under the OPEC deal, without giving further details.
Iraq Oil Minister Jabar Ali al-Luaibi told reporters Iraq was "hoping for a better price". Iraq had reduced its oil exports by 170,000 bpd and was cutting them by a further 40,000 bpd this week, he said.
BMI Research said overall "compliance to the OPEC/non-OPEC oil production cut appears to be positive ... We calculate compliance with production cuts at around 73 percent," led by high compliance from members of the Gulf Cooperation Council, namely Saudi Arabia, United Arab Emirates, Kuwait, Qatar, Bahrain and Oman.
Prices were also lifted by news of record Chinese car sales, which rose by 13.7 percent last year to 28 million sold vehicles.
Reflecting China's growing fuel consumption, its net crude imports will rise 5.3 percent to 396 million tonnes (around 8 million bpd) in 2017, state-owned China National Petroleum Corp (CNPC) said on Thursday. Its crude demand will hit a record 594 million tonnes this year (around 12 million bpd), CNPC said.
In the United States, traders said an inventory report published by the U.S. Energy Information Administration on Wednesday implied oversupply as crude stocks unexpectedly rose by 4.1 million barrels to 483.11 million barrels. [EIA/S]