As of 11am on Tuesday, January 3, Brent crude was trading at $58.10 per barrel, while West Texas Intermediate (or USA oil) was at $55.04.
Meanwhile, Libya, one of the two OPEC countries exempt from reducing production, increased its output to 685.000 barrels a day from around 600,000 in December. Russian Federation agreed to cut its production by 300,000 barrels a day, while Mexico, Azerbaijan and Kazakhstan are reducing oil output by 100,000, 35,000 and 20,000 barrels per day respectively.
Meanwhile, hedge funds are reported to have amassed a record bullish position in the crude oil market in anticipation that the meeting of OPEC and non-OPEC oil producers will rebalance the market and reduce excess stocks next year. They, however, lowered their long-term oil and gas projections to $50 and $2.75, respectively.
The agreement - which was effective as of January 1 - is meant to address a supply glut in a bid to buoy floundering prices.
Generally robust growth indicators from the US, Eurozone and China increased optimism surrounding the outlook for global demand and stronger growth conditions should also have a positive impact on oil demand, which would underpin prices. This will become a challenge for OPEC which plans to raise oil prices to new levels.
Customs outage causes long lines at airports
The cause remained under investigation. "Thanks for your patience", Miami International Airport said on its Twitter feed. The U.S.Customs Border Protection confirmed that there was no indication that the disruption was malicious in nature.
Feb. WTI oil dropped $1.39, or 2.6%, to settle at $52.33/bbl after rising to $55.24.
According to Abdullah Al Mandhari, CEO of EOR LLC, Oman must cut production from fields that are high cost producing and focus on enhanced oil recovery to honour the agreement and keep improving production facilities.
Oil prices edged up on Wednesday, recovering some losses from the previous day when the US -dollar hit a 14-year peak and weighed on crude markets.
Most of the major subcomponents of the report pointed to continued expansion in manufacturing activity, data released by the Institute for Supply Management (ISM) showed Tuesday.