By Lucy Craymer
Oil futures were slightly higher in Asia trading Friday, as focus shifts back to the recently announced production cuts in crude oil.
Light, sweet crude futures for January delivery rose 47 cents, or 0.9%, to $52.37 a barrel in the Globex electronic session of the New York Mercantile Exchange. February Brent crude on London's ICE Futures exchange rose 42 cents, or 0.8%, to $55.64 a barrel.
The rise extends moves seen in the previous session that came amid signals that major oil producers will stick to their agreement to cut production next year, and as the dollar's rally slowed.
"With investors now expecting a relatively high level of compliance with the production cut agreements, prices should be well supported in the new year," said Australia & New Zealand Banking Group in a research note.
The Organization of the Petroleum Exporting Countries at the end of November agreed to cut production by 1.2 million barrels a day starting next month, as a two-year-long overhang has depressed prices. The pact was followed by an agreement from 11 non-OPEC producers to cut their supplies by 558,000 barrels a day.
However, some people remain skeptical that the planned cuts will be as substantial as the market currently expects.
"We doubt that the OPEC-led cuts will reduce oil supply by as much as some are hoping," said Capital Economics, citing three reasons for skepticism. It noted that it believes it is unlikely the cartel will implement the cuts in full, while it expects that non-OPEC production will likely increase.
Furthermore, it added that Chinese imports could fall back if prices remain high as much of the surge in oil imports has been driven by a desire to fill the country's strategic reserves.
Nymex reformulated gasoline blendstock for January--the benchmark gasoline contract--rose 115 points to $1.5686 a gallon, while January diesel traded at $1.6862, 139 points higher.
ICE gasoil for January changed hands at $493.25 a metric ton, up $3.00 from Friday's settlement.
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(END) Dow Jones Newswires
December 18, 2016 22:13 ET (03:13 GMT)
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