Oil prices rose for a fourth straight session early Wednesday, trading above $56/bbl, as the global market awaits the implementation of OPEC production cuts on January 1.

Brent was up $0.36 at $56.45/bbl at 5:00 am ET. The global benchmark hit $57.89/bbl on December 12, its highest since July 2015. Meanwhile, WTI was up $0.27 at $54.17/bbl, approaching the 2015 high of $54.51 seen on December 12.

The US benchmark has gained 25 percent since mid-November on expectations of OPEC’s supply reduction and positive US economic data that supported equity prices, Reuters reported.

The market is awaiting the enactment of the OPEC and non-OPEC supply cut agreements, which, if carried out, will lower production by nearly 1.8 M/bpd.

As we’ve discussed, whether OPEC members will comply with a cut is doubtful. However, there are signs that at least some of them will abide by the deal.

Venezuela says that it will reduce its oil production by 95,000 bpd in 2017. And Iranian Oil Minister Bijan Zanganeh said he expected OPEC to abide by the agreement. “While competing, we do have engagement,” Reuters quoted him as telling the Shana news agency.

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About The Author Jeff Reed

I specialize in analysis of the oil and gas sector- with emphasis on the Middle East, OPEC, and the politics of energy. I hold a BA in Political Science and MA in Theological Studies from the University of St. Thomas. Prior to a career in oil and gas journalism, I was a Roman Catholic priest serving churches in the Houston area. I also taught high school for a year in Oakland, California, and worked for two years in retail management. Among my other areas of interest are political philosophy, religion and society, culture and the arts, and philosophy.