NYMEX crude trades higher near $57 per barrel after a 1.5% gain yesterday. Crude hit a high of $57.55 per barrel in intraday trade yesterday, the highest level since November 2018.
Crude hit 3-month high as OPEC’s compliance with production cuts fuelled tightness concerns. The OPEC+ Joint Technical Committee assessed compliance with the group's new production-cuts agreement at 83% in January.
OPEC and non-OPEC allies have agreed to cut output by 1.2 million barrels per day from January to June 2019. Meanwhile, Saudi Arabia and Russia have also indicated that they will deepen production cuts.
Adding to supply concerns is temporary close of Saudi’s Safaniyah oilfield. US sanctions on Iran and Venezuela has also fuelled expectations of lower supply from OPEC.
Also supporting crude price is API weekly report which noted a smaller than expected 1.26 million barrel increase in US crude oil stocks.