Oil futures rose in American trade even as the dollar index scaled November 13 highs, following earlier inflation data from the US, the world's largest oil consumer and producer, and amid renewed optimism that OPEC's steep production cuts might balance the market after all.
As of 06:33 GMT, US crude futures due in January rose 1.37% to $51.70 a barrel, while Brent February futures rallied 0.83% to $60.47 a barrel, as the dollar index added 0.21% to 97.42.
US Inflation
Earlier US data showed producer prices rose 0.1% in November, beating estimates of no change, while slowing down from October's 0.6% increase.
Core prices, excluding food and fuel, rose 0.3%, beating forecasts of 0.1% and missing estimates of 0.5%.
Otherwise, Saudi Arabia said it plans to cut output to 10.2 million bpd in January, a 900 thousand bpd cut from November, while Russia plans a cut between 50 and 60 thousand bpd next month.
OPEC announced an agreement to cut total output by 1.2 million bpd in coordination with allies such as Russia, with the cuts to start in January and with Iran, Libya, and Venezuela, gaining exceptions from the required cuts.
Russia's current output stands at about 11.37 million bpd, while recent reports indicate that Saudi Arabia's production increase by 0.5 million bpd last month to up to 11.3 million bpd, as US output steadied at record highs at 11.7 million bpd.
The concerns remain that OPEC might fail to contain the supply glut looming in the horizon despite the decision to cut output by 1.2 million bpd, as demand is expected to take a hit in major economies.
Otherwise, Baker Hughes reported a drop of 10 rigs in the US oil rig count last week to a total of 887 rigs.