NYMEX crude trades higher above $53 per barrel Wednesday after a 1.3% gain yesterday. Crude fell as low as $51.23/bbl earlier this week, the lowest level since Jan.17, but has recovered on OPEC's pledge to cut output.
OPEC, in its monthly report, noted that production fell by almost 800,000 barrels in January, in line with the production cut deal. The production deal between OPEC and non-OPEC allies includes production cut of about 1.2 million barrels per day from January to June 2019, of which OPEC's share is 800K bpd.
While OPEC is adhering to production cuts, Saudi Arabia has indicated that it will further lower output next month. Saudi Arabia said it would pump about 9.8 million barrels a day next month, 0.51 million barrel per day lower than the limit it agreed to in December's OPEC+ agreement.
Crude also gained support from API weekly report which noted an unexpected 0.998 million barrel decline in US crude oil stocks.
Also supporting crude is gains in US equity market and correction in US dollar index amid easing worries about US-China trade dispute. US-China officials will meet on Thursday and Friday this week to discuss trade issues however market expectations were low that a deal will be reached. Tensions eased as US President Donald Trump said he's open to extending a March 1 deadline to raise tariffs on Chinese products if the two sides are near an agreement.