Crude oil prices rise on anticipation of inventory reduction, following cuts

Dec. 12 (UPI) -- Crude oil prices rose early Wednesday, buoyed by expectations of a U.S. inventory reduction, as well as reports of production cuts by OPEC, Libya and Canada.

West Texas Intermediate front-month future prices rose 1.8 percent to $52.59 per barrel as of 7:00 a.m. EST while Brent crude oil futures gained 1.6 percent to $61.19 per barrel as of the same time.

"The OPEC plus deal to curb production to the tune of 1.2 million barrels per day over the coming months has helped stabilize and potentially create a floor in crude oil," Ole Hansen, head of commodity strategy at Saxo Bank, told UPI.

"Today the market will be turning its attention to the Weekly Petroleum Status Report from the United States' Energy Information Administration," at 10:30 a.m. EST, he added.

"Surveys ahead of the report point to a lower, but still healthy, reduction of 3.5 million barrels. This is on top of the export-led drop of 7.3 million barrels the previous week," Hansen said.

In addition, production reductions worldwide are also helping prices, Amir Hekmati, an oil futures spec trader at Lucid Energy, told UPI.

"Other news of production coming off in Canada and Libya, coupled with consecutive draws between this week and last, are slowly changing market sentiment," Hekmati said.

Libya announced during the week that one of its fields was occupied by a militia, which could result in a reduction of over 300,000 barrels per day of oil production as the field had to be shut for security. Canada's Alberta earlier this month announced plans to reduce oil production by a similar volume, because of current weakness in oil prices.

"I think volatility will continue, and the market is setting up for a significant spike, possibly in the first half of 2019," Hekmati added.