Oil prices were stable yesterday, largely maintaining gains from the previous session as Opec-led supply cuts and United States sanctions against Venezuela provided the market with support.
International Brent crude oil futures were at US$62.76 per barrel at 0507 GMT yesterday, one US cent above their last close. Brent rose by more than 3 per cent in the previous session to their highest close since Nov 21.
US West Texas Intermediate (WTI) futures were at US$55.20 per barrel, down six US cents from their last settlement.
WTI settled 2.73 per cent higher in the last session at its highest close since Nov 19.
Output declines from the Organisation of the Petroleum Exporting Countries as they make good on their pact to curb a supply overhang were compounded by falling US oil rig counts and sanctions on Venezuelan oil sales.
"While Venezuela's output reportedly rose last month, fresh US sanctions on the country could see 0.5 to 1 per cent of global supply curtailed," said commodities analyst Vivek Dhar for Commonwealth Bank of Australia in a note yesterday.
The sanctions will sharply limit oil transactions between Venezuela and other countries and are similar to those imposed on Iran last year, experts said after examining details posted by the Treasury Department.
Opec oil supply fell last month by the largest amount in two years despite sluggish production declines from Russia, according to a Reuters survey.
Russian oil output last month missed the target for the output cuts, Energy Ministry data showed on Saturday.
Production last month declined to 11.38 million barrels per day, but that was only down by 35,000 bpd from its October 2018 level that is the baseline for the pact.
Russian Energy Minister Alexander Novak has said the country's overall cuts from the October baseline would total 50,000 bpd last month. Russia has pledged to reduce oil output by 230,000 bpd from October.
US energy firms last week cut the number of oil rigs operating to their lowest in eight months, to 847, as some drillers followed through on plans to spend less on new wells this year.
"The collapse in oil prices late last year has resulted in more cautious spending by US oil explorers," said Mr Dhar.
Meanwhile, hopes for thawing China-US relations have also helped ease concerns over slowing economic growth.
"While the United States and China have yet to reach a deal, markets were buoyed by reports that they have made significant progress," ANZ Bank said in a research note.
US President Donald Trump last week said he would meet with Chinese President Xi Jinping, perhaps twice, in the coming weeks to try to seal a comprehensive trade deal with Beijing, but acknowledged it was not yet clear whether a deal could be reached.
Overall, Fitch Solutions said yesterday oil markets had a"fundamentally bullish outlook due mainly to the supply cuts led by Opec as well as increasing oil demand despite the slowdown in economic growth".