Oil prices rose nearly 2 percent on Thursday on news that key crude exporters, including Saudi Arabia and Russia, were cutting production as promised in a deal to reduce a global glut and on forecasts of record demand in China.
Brent crude oil LCOc1 hit a high of $56.43 a barrel before easing slightly, and it was up 95 cents at $56.05 by 1:00 p.m. ET (1800 GMT). U.S. crude CLc1 rose 78 cents to $53.03 a barrel.
Saudi Energy Minister Khalid al-Falih said the kingdom had cut production to its lowest in almost two years, a move that would help accelerate a rebalancing of the global oil market.
Falih told a conference in Abu Dhabi that global demand for oil would grow by well over 1 million barrels per day (bpd) in 2017 and the market would tighten in two to three years.
The Organization of the Petroleum Exporting Countries agreed in November to cut production at the start of the year to try to reduce a supply glut that has depressed prices for more than two years.
Several OPEC members, including Iraq and Kuwait, said they were implementing the deal and OPEC Secretary-General Mohammed Barkindo said the group expects global oil inventories to fall by the second quarter of this year in response to the agreement.
Separately, Russia's Energy Minister Alexander Novak said the country was starting to implement its own planned cuts, in conjunction with an agreement among non-OPEC producers to reduce output.