Oil prices up as market awaits OPEC cuts to take effect

By Övünç Kutlu

ANKARA (AA) - Crude oil prices were up early Thursday on a higher note as the global oil market awaits additional production cuts by OPEC and allies to take effect beginning on new year.

International benchmark Brent crude was trading at $67.44 per barrel at 0630 GMT for a 0.36% gain on Thursday after closing Tuesday at $67.20 a barrel.

American benchmark West Texas Intermediate was at $61.33 a barrel at the same time for a 0.23% increase after ending the previous session at $61.19 per barrel.

Most markets around the world had limited trading on Wednesday due to Christmas Day.

OPEC and its allies, dubbed as OPEC+, agreed on Dec. 6 to curb their production by an additional 0.5 million barrels per day (bpd) starting from Jan. 1.

That adds to their existing output cut of 1.2 million bpd that had been decided in December 2018.

Saudi Arabia, OPEC's de facto leader, also said this month that it would voluntarily lower its individual output level by 400,000 bpd.

As member countries of OPEC+ prepare to lower their oil production, investors expect some oversupply in the global oil market to fall at the beginning of 2020, which create an upward push on crude prices.

On the demand side, the U.S. and China reaching a phase one trade deal encourages investors that global oil demand could be stronger than most expectations in 2020.