Oil prices have climbed today as Mohammad Barkindo, secretary general of the Organisation of the Petroleum Exporting Countries (Opec), said the group and non-members including Russia will boost compliance with agreed oil production curbs.
Benchmark Brent crude prices are trading 1.73 per cent higher, or $0.97, at $57.15 per barrel. West Texas Intermediate prices are up 2.23 per cent, or $1.19, at $54.59.
Barkindo today said he was "cautiously optimistic" on the outlook for the oil market. "Confidence has returned to this market," he said at a news conference at the Energy Institute's International Petroleum Week in London. "It's work in progress, but the trend I think has commenced."
Opec had agreed to cut output by about 1.2m barrels per day (bpd) from the start of 2017, while Russia and 10 other non-Opec producers agreed to cut half as much, to curb the global oversupply and prop up prices.
January's Opec data report showed the cuts had received a record of more than 90 per cent compliance. However, Russia and other non-Opec nations have delivered a smaller amount of cuts so far. Barkindo said this would increase.
"I am confident that the non-Opec will also raise their level of conformity to bring it at par with Opec," he said.
Craig Erlam, analyst at Oanda said oil could test the upper end of the trading range its been stuck in so far this year.
Erlam added: "Given its ability to largely shrug off the substantial inventory builds over the last couple of weeks, it perhaps shouldn’t come as a surprise that we’re seeing these upper bounds being tested, particularly coming on the back of reports of high levels of compliance on the production cut which was agreed at the back end of last year."