Market - - Jan 10,2017
On Tuesday, oil markets moved higher on bleak expectations that some form of supply cut would be imposed.
The positive shift in the oil markets on Tuesday helped in a minor recovery from big losses that occurred the previous day.
The international benchmark for oil prices, Brent crude futures, were trading at $55.14 per barrel at 0426 GMT; surged 20 cents from their last close.
On the other hand, U.S. West Texas Intermediate (WTI) crude oil futures were dealing at $52.12 per barrel; up by 16 cents.
According to BMI Research, "Coordinated output cuts will support the market rebalancing that will draw down global stock levels, leading us to revise up our Brent crude forecast for 2017 to $57 per barrel".
Analysts said the small gains on Tuesday were born from the expectations that some of the supply cut framed by the Organization of the Petroleum Exporting Countries (OPEC) and other prominent producers such as Russia would unfold despite uncertainty over full implementation.
However, analysts have warned about the downside risk for oil because of rising output in several regions.
The value of crude tumbled in the previous session on burdens that surging output in Iraq and Iran were wrecking efforts to control the global fuel supply surplus which has troubled the market for over two years.
At present, supplies in North America are also rising. The average Canadian rig count for last December 2016 was 209, higher by 36 from the 173 recorded in November 2016, revealed by Matt Stanley, fuel broker at Freight Services International in Dubai.
Also, in the United States, last week energy companies added rigs for a straight tenth week in a row, spreading the drilling recovery into the eighth month with crude prices controlled at levels at which several U.S. drillers can function profitably.