Oil markets stabilised today after sharp falls before and after yesterday's decision to raise US interest rates from 0.5 per cent to 0.75 per cent.
Brent crude, the global benchmark, was up 0.7 per cent to $54.29 a barrel, while US sweet crude rose 0.3 per cent to $51.17.
On Monday, Brent crude hit a temporary high of $57 a barrel for the first time since July 2015 as investors celebrated the first deal in 15 years between 13-member cartel Opec and other oil-producing nations.
The deal with 11 countries including Russia, Mexico and Kazakhstan will shave off another 558,000 barrels daily production in the first half of 2017, adding to a 1.2m barrels per day (bpd) production cut Opec agreed to on 30 November.
However, prices receded in the run-up to the US Federal Reserve's interest rate hike announcement and fell afterwards in the wake of a dollar rally.
Since the Fed's announcement, the greenback has risen to the highest level in 14 years, according to the dollar index, which measures the US currency against a number of its major trading peers.
Crude prices have also received a boost from reports of falling US crude inventories. US Energy Information Administration (EIA) data showed that commercial crude inventories last week declined by 2.56m barrels to 483.19m barrels.
ANZ bank said on Thursday oil markets would move into a substantial deficit in the first quarter of 2017 if Opec and other producers follow through and reduced output as promised.
"This will likely push oil prices well above $60 per barrel early next year," ANZ analysts said in a note to clients.