US crude settles at $53.88, rising 2% on signs Russia and OPEC are cutting output
Oil prices were higher on Wednesday on signs that Russia and OPEC producers are delivering on promised supply reductions, though weekly U.S. supply data suggested a crude glut may persist.
Oil prices extended gains after U.S. National Security adviser Michael Flynn said the White House is putting Iran “on notice” following its recent ballistic missile tests. Traders told CNBC heightened tensions raise fears that the United States will pull out of the Iran nuclear deal or impose new sanctions, which could effect Tehran’s ability to continue ramping up oil production.
Russia cut production in January by around 100,000 barrels per day (bpd), according to data seen by Reuters. A day earlier, a Reuters survey found high compliance by OPEC with agreed cuts.
“Any hopes of a sustained recovery in price will depend on increasing efforts by OPEC to curb output though the prospect of an upside breakout will be undermined by the budding revival in U.S. crude production,” Stephen Brennock of oil broker PVM said.
Written by Sergei Karpukhin