Feb. 12 (UPI) -- Oil prices rallied early Tuesday amid expectations of additional cuts by nations in OPEC while current price levels remain relatively low compared with four months earlier .
As of 9:50 a.m. EST, West Texas Intermediate futures traded 2.6 percent higher at $53.75 per barrel while Brent crude futures traded 2.6 percent higher at $63.11 per barrel.
"Oil is rallying firmly today, boosted by encouraging signs of OPEC supply cuts, as well as comments out of Saudi energy minister Khalid al-Falih that the kingdom is making even deeper supply cuts," Matt Smith, director of Commodity Research at ClipperData, told UPI.
"He has built up a large amount of credibility in the last couple of years by providing forward guidance to the oil market about Saudi's next actions -- and for them to play out. On this basis, we should expect lower supplies to be forthcoming, and ongoing low Saudi flows to the U.S.," Smith added.
WTI crude futures are lower than a high for this year of $55.26 per barrel on February 1. WTI crude futures traded at $46.54 on January 2.
Earlier in the day, OPEC issued its January report indicating that Saudi Arabia, which had led efforts by OPEC to cut at least 800,000 barrels per day in January, reduced its output by 350,000 barrels per day compared with December along with most other members. The entire OPEC cut was equivalent to the total reduction agreed to, though it includes the involuntary reductions by members like Venezuela or Libya.
OPEC projected slightly slower demand growth than it previously forecasted, at a time when non-OPEC countries are increasing production. Unlike previous years, the United States is now the world's biggest crude oil producer and less vulnerable to price increases.
"Since the beginning of the year, crude oil remains relatively cheap, moving between $51- $55 per barrel," said Jeanette Casselano, an official of the AAA driver organization, which estimates gasoline retail at service stations at about $2.28 per gallon on average across the United States at the start of the week.
Crude prices are lower than on Oct. 3, when WTI futures traded above $76 per barrel.