NEW YORK (Reuters) - Oil prices rose more than 1 percent on Thursday on news that key crude exporters, including Saudi Arabia and Russia, were cutting production to reduce a global crude glut, and on forecasts of record demand in China.
U.S. crude futures CLc1 settled up 76 cents to $53.01 a barrel, a gain of 1.5 percent. Brent crude oil LCOc1 settled up 91 cents, or 1.7 percent, at $56.01, off the session high of $56.43 a barrel.
Oil prices have stayed in a range in the last month-and-a-half, with buyers encouraged by news of output cuts by major world producers but wary of past tendencies by these nations to produce more than agreed.
The Organization of the Petroleum Exporting Countries agreed in November to cut production at the start of the year to try to reduce a supply glut that has depressed prices for more than two years.
“The market is in a consolidation pattern, and as we get more and more signs of them implementing cuts we’ll have another test of $55, and the market try to push higher and wait to see if they cheat,” said Gene McGillian, manager of market research at Tradition Energy in Stamford, Connecticut.
Saudi Energy Minister Khalid al-Falih said the kingdom had cut production to its lowest in almost two years.
Falih told a conference in Abu Dhabi that global demand for oil would grow by well over 1 million barrels per day (bpd) in 2017 and the market would tighten in two to three years.
Several OPEC members, including Iraq and Kuwait, said they were implementing the deal and OPEC Secretary-General Mohammed Barkindo said the group expects global oil inventories to fall by the second quarter.
Separately, Russia’s Energy Minister Alexander Novak said the country was starting to implement its own planned cuts, in conjunction with an agreement among non-OPEC producers.
BMI Research estimated overall compliance with production cuts at about 73 percent.
China National Petroleum Corp (CNPC) said the country’s net crude imports will rise 5.3 percent to 396 million tonnes in 2017, with crude consumption headed for a record 594 million tonnes or 12 million bpd this year.
The country’s top state-owned oil producer, however, cautioned that demand growth for products like gasoline and diesel will slow and the domestic fuel glut will remain.
In the United States, inventories of crude and products last week rose more than anticipated, while a sharp increase in refining production to record highs pointed to solid demand.
Additional reporting by Henning Gloystein in Singapore; Editing by David Gregorio and Marguerita Choy