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Reuters
NEW YORK
Oil prices rose about 2 percent to near three-week highs on Tuesday after OPEC said it was sticking to its agreement to cut production and hoped compliance with the deal would be even higher as it expects other producers join its efforts to curb a global glut.
"While Barkindo's statement puts a confident spin on market fundamentals, we'd say questions do remain, given that Iran seems to be signaling increased production rather than improved compliance," Tim Evans, an energy futures specialist at Citi Futures said in a note.
Under the deal, Iran was allowed to boost output from its October level and Tehran expects its oil production to reach 4 million barrels per day by mid-April.
Brent crude futures traded at $57.08, 90 cents or 1.6 percent higher by 11:17 a.m. EST (1617) GMT after hitting the highest since Feb. 2 at $57.31.
US light crude was up $1.07, or 2 percent, at $54.47, after peaking at 54.68, its highest since Jan. 3. Futures for delivery in March were set to expire at the end of the trading session.
The more active US crude futures for April delivery were up 1.9 percent at $54.81.
From a technical perspective, the tight consolidation above last year's key broken resistance levels suggests oil prices have been coiling to break higher, said Fawad Razaqzada, technical analyst for Forex.com.
"I am anticipating both oil contracts to break out of their recent ranges and head higher."
OPEC cuts have spurred a speculative move into crude oil that has pushed prices towards the top of their recent ranges. Money managers hold the highest number of net long Brent and US crude futures and options on record, data showed on Monday and Friday, betting on higher prices to come as OPEC and other key exporters reduce production. Still, the Relative Strength Index (RSI) in US crude futures remained at about 58 on Tuesday, well below the overbought level of 70, Reuters data showed.
