Brent, WTI Prices Pick Up

Oil prices rose on Tuesday, supported by a falling US dollar and Saudi Arabia saying it would adhere to OPEC’s commitment to cut output. Gains were capped by rising US production and skepticism that the Organization of Petroleum Exporting Countries as a whole would comply with its commitments to reduce supplies, Reuters reported.

Brent crude futures, the international benchmark for oil prices, were up 66 cents at $56.52 a barrel. US West Texas Intermediate (WTI) crude futures were up 78 cents at $53.15.

The dollar, along with stocks and bond yields, fell across the board on Tuesday after US president-elect Donald Trump said that the strong greenback was hurting US competitiveness.

Traders said that oil drew some support from top crude exporter Saudi Arabia, which said it would adhere strictly to its commitment to cut output under the agreement between OPEC and other producers, such as Russia.

Under the agreement, OPEC, Russia and other non-OPEC producers have pledged to cut oil output by nearly 1.8 million barrels per day, initially for six months, to bring supplies back in line with consumption.

“The market genuinely seems quite happy here (with oil around $55) ... but people are watching with caution as the slightest hint of this OPEC/non-OPEC agreement going wrong is going to drive the market down,” said Matt Stanley, a fuel broker at Freight Investor Services in Dubai.

Despite this, crude futures have fallen by 5% since their early January peaks on doubts over producers’ willingness to comply fully with the cuts.