Oil prices soared on Tuesday, January 24, as market players looked ahead to weekly data from the U.S. on stockpiles of crude and refined products.
Brent oil for March delivery on the ICE Futures Exchange in London rose 30 cents, or about 0.5%, to $55.52 a barrel, after falling 26 cents, or around 0.5%, a day earlier.
Crude oil for March delivery on the New York Mercantile Exchange tacked on 41 cents, or nearly 0.8%, to $53.14 a barrel by 10:25AM ET (15:25GMT). The U.S. benchmark slumped 47 cents, or 0.9%, on Monday.
Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (21:30GMT) later on Tuesday. Official data from the Energy Information Administration will be released Wednesday, amid forecasts for an oil-stock rise of 2.7 million barrels.
Prices received a boost amid ongoing indications that major oil producers are sticking to their pledge to cut back output, investing.com.
Iraq’s oil minister said on Monday that most oil majors working on its territory were participating in oil output reductions agreed as part of the deal between OPEC and non-OPEC producers to help to balance the market.
However, gains were limited as prospects of rising U.S. production weighed on the market.
According to oilfield services provider Baker Hughes, the number of rigs drilling for oil in the U.S. last week jumped by 29 to 551, the biggest one-week increase in nearly four years.
U.S. drilling activity has risen by more than 6% since mid-2016, taking it back to levels seen in late 2014, when strong U.S. crude output contributed to a collapse in oil prices.
The data raised concerns that the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand.
OPEC and non-OPEC countries have made a strong start to lowering their oil output under the first such pact in more than a decade, energy ministers said over the weekend as producers look to reduce oversupply and support prices.