NEW YORK, Dec. 28 (UPI) -- Crude oil prices edged higher in early trading Wednesday in thin volumes amid expectations OPEC will hold the production line, though doubts persist.
Members of the Organization of Petroleum Exporting Countries and non-OPEC members agreed to meet Jan. 13 to review compliance with recent agreements to start cutting production next week. The move is designed to ease the supply-side strains that pulled oil prices below $30 per barrel in early 2016 and investors saw word of the meeting as a reason for optimism.
Iraqi Oil Minister Jabar al-Luaibi told the official Kuwait News Agency his country was committed to cutting as much as 210,000 barrels per day from production starting next month. Iraq, he said, is keen on maintaining balance in the global market and has an eye on oil priced at $60 per barrel.
The price for Brent crude oil moved up 0.6 percent to $56.44 per barrel to start the trading day in New York. West Texas Intermediate, the U.S. benchmark price for oil, gained 0.5 percent to open at $54.17 per barrel.
A preview by S&P Global Platts of this week's official market data from the U.S. Energy Information Administration forecasts a decline in crude oil storage levels, which would suggest supply-side pressures are easing short-term. In an emailed report, Platts said U.S. crude oil inventories will still end the year higher than where they started 2016.
"But expectations are high that the global oil balance will tighten next year," Geoffrey Craig, the oil futures editor for Platts, remarked in the report.
Collectively, the agreement between OPEC and non-OPEC members is expected to sideline as much as 1.8 million barrels per day from the global market, about what's expected in demand growth for next year.
Iran's oil minister, for his part, said there are no guarantees with OPEC and much of the rally for crude oil prices has been around expected, rather than concrete, action. Olivier Jakob, managing director of Switzerland-based consultant Petromatrix, said in an emailed report that actual compliance won't be known until after the mid-January meeting.
"The OPEC and non-OPEC monitoring committee is scheduled to meet on Jan. 13, which will provide an occasion to say that everybody is working on the cuts, two weeks before export data will show that not everybody has been already cutting supplies," he said.