Oil prices rose on Jan. 12, supported by reports that key members of OPEC were starting to cut production as promised and by forecasts of strong demand growth in China.
Brent crude futures was up 70 cents at $55.80 a barrel (bbl) by 5:35 a.m. CT (11:35 GMT). West Texas Intermediate crude was up 60 cents at $52.85.
OPEC 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 Jan. 12 said the OPEC deal would accelerate the rebalancing of the global oil market and that prices would respond later this year.
Falih told a conference in Abu Dhabi global demand for oil would grow by more than 1 MMbbl/d 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 bbl/d and was cutting them by a further 40,000 bbl/d 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%," 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 grew by 13.7% between 2015 and 2016 to 28 million sold vehicles.
Reflecting China's growing fuel consumption, its net crude imports will rise 5.3% to 396 million tonnes (around 8 MMbbl/d) in 2017, state-owned China National Petroleum Corp. (CNPC) said Jan. 12. Its crude demand will hit a record 594 million tonnes this year (around 12 MMbbl/d), CNPC said.
In the U.S., traders said an inventory report published by the U.S. Energy Information Administration (EIA) on Jan. 11 implied oversupply as crude stocks unexpectedly rose by 4.1 MMbbl to 483.11 MMbbl.
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