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During Wednesday’s trading session, oil prices moved higher on expectations that US oil inventories are declining, and on signs that oil producers will push through with the agreed production cuts that is taking effect in the current week.

Bjarne Schieldrop, the chief commodities analyst at Oslo-based SEB Markets stated that the recent fundamentals are driving crude oil futures higher. “Positive equities and gains in industrial metals this morning, as well as expectations that US crude oil stocks will show a decline are ingredients helping to drive a slight gain in Brent crude.”

Weekly US statistics on oil supply are estimated to display a 1.7-million-barrel loss on Thursday, according to analysts.

It could be recalled that members of the Organization of the Petroleum Exporting Countries (OPEC) in November agreed their first output cut since 2008 in an attempt to stabilize oil prices.

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Kuwait, an OPEC member, also sparked hopes that oil producers will definitely comply with the deal to limit oil output that may be a solution to the crude oil surplus dogging the market for over two years. Kuwait’s state-owned oil producer declared today that it would cut production in the first quarter.

As part of the OPEC deal, Kuwait has to decrease output by 131,000 barrels per day (bpd).

In monitoring the OPEC agreement, a committee meeting among the members is scheduled on January 21-22 in Vienna, Austria.

Analysts from Cenkos Securities said in a note that: “Prices are likely to remain volatile until there is evidence that quotas are being adhered to.”

In mirroring a tightening market as well, traders are forecasting Saudi Arabia, the world’s top oil exporter, to lift the official selling price for its crude to Asia in February.

As of writing, Brent crude futures inched higher by 0.43% or 23 cents to trade at $55.74 per barrel. In the prior session, the Brent crude contract touched an 18-month peak but was curbed by a stronger dollar afterwards. Meanwhile, US West Texas Intermediate (WTI) crude futures had edged up a hefty 0.82% or 43 cents to $52.76 per barrel.

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