Singapore (Reuters): Following the decision by OPEC (the Organization of the Petroleum Exporting Countries) oil prices ascended on Monday, in anticipation of tighter crude supply going into 2017 and other producers to cut output to sustain prices.
Brent crude futures, the international benchmark for oil prices, were trading at $55.51 per barrel at 0304 GMT, up 30 cents, or 0.5 percent, from their last close.
American West Texas Intermediate (WTI) crude oil futures were up 38 cents, or 0.7 percent, at $52.28 a barrel.
The higher prices in front-month crude futures were due to expectations of a tighter market, traders alleged.
OPEC and other producers directed by Russia have proclaimed decrease of almost 1.8 million barrels per day (bpd) in oil production from January 2017 in an effort to reinforce prices to reduce extensive global overproduction which has seen output outstrip consumption for over two years.
ANZ bank said on Monday, "With investors now expecting a relatively high level of compliance with the production cut agreements, prices should be well supported."
"Some weakness in U.S. dollar also helped improve investor sentiment."
The dollar has lost 0.8 percent against a basket of other leading currencies since hitting 2002 highs last week.
Swings in the dollar can affect oil demand as they influence fuel prices for any country using its own currency domestically.
Brent and WTI crude futures technical chart indicators were bullish, with next resistance points seen at $55.79 and $57.57 per barrel for Brent, and at $52.74 and $53.36 per barrel for WTI crude futures, Reuters technical commodity analyst Wang Tao told.
Despite this, there were factors that weighed on markets, preventing prices - which remain relatively low - from rising more.
In the US, which did not participate in the agreement to cut output, drilling for new production has increased for seven straight weeks.
Drillers added 12 oil rigs in the week to Dec. 16, bringing the total count to 510, the highest since January, though still below 541 rigs a year ago, energy services firm Baker Hughes said on Friday.
U.S. bank Goldman Sachs said following the data release, "Since its trough on May 27, 2016, producers have added 194 oil rigs (+61 percent) in the U.S."
As a result, U.S. oil production is edging up, rising from below 8.5 million bpd in July to almost 8.8 million bpd by mid-December.