Oil prices rose on Tuesday in thin pre-Christmas trading after Russia said cooperation with OPEC on supply cuts would continue and amid signs Saudi Arabia and Kuwait could take as much as a year to bring a major field back to full capacity.
Brent crude was up 30 cents, or 0.45 percent, at $66.69 a barrel by 1321 GMT. US West Texas Intermediate was 23 cents higher at $60.75 a barrel.
OPEC and Russia will continue their cooperation as long as it is “effective and brings results”, Russian energy minister Alexander Novak said in an interview on Monday.
OPEC and allies agreed in November to extend and deepen output curbs in place since 2017. The reduction of output could see as much as 2.1 million barrels per day (bpd) taken off the market, or about 2 percent of global demand.
Still, OPEC needs to do more to balance the market on a sustainable basis, Bjornar Tonhaugen, head of oil market research at Rystad Energy, said in a note.
“The OPEC cuts didn’t fully solve the problem - instead they offer a light bandage to get through the first quarter of 2020,” said Tonhaugen.
A deal signed on Tuesday between Kuwait and Saudia Arabia on the Neutral Zone between the two countries could add to supply next year. The agreement aims to end a five-year dispute between the OPEC members and reopen fields which can produce 0.5 million bpd or 0.5 percent of global supply.
US oil major Chevron, which helps operate the fields, said full production was expected within 12 months.
While OPEC has been cutting production, US producers have been filling the gap, pumping ever greater amounts of crude to reach a record high of about 13 million bpd in November.
That has helped swell inventories with US stocks up about 1 percent this year.
Crude stocks are, however, expected to have fallen by about 1.8 million barrels last week, a second week of declines, according to a preliminary Reuters poll.
The weekly government report on inventories has been delayed by two days due to Christmas. The report is normally released on Wednesday at 10:30 a.m. EST (1530 GMT).