Oil prices hit 18-month highs on Jan. 3, the first trading day of 2017, buoyed by hopes that a deal between OPEC and other big oil exporters to cut production, which kicked in on Jan. 1, will drain a global supply glut.
Benchmark Brent crude jumped more than 2% to a high of $58.37, up $1.55 a barrel (bbl) and its highest since July 2015. By 6:30 a.m. CT (12:30 GMT), Brent had eased to $58.07, up $1.25.
West Texas Intermediate hit an 18-month high of $55.24, up $1.52/bbl, also its highest since July 2015, before slipping to around $54.95.
Oil futures exchanges were closed on Jan. 2 for New Year public holidays.
Jan. 1 marked the official start of a deal agreed by OPEC and other exporters such as Russia to reduce output by almost 1.8 MMbbl/d.
"First signals suggest the OPEC and non-OPEC production cuts are raising hopes that the global oil oversupply will diminish," said Hans van Cleef, senior energy economist at ABN AMRO Bank NV in Amsterdam.
Investors will be watching OPEC very closely to see whether the group's members keep their promises to reduce production:
"If 2016 was the year of words, 2017 must be the year of actions," said Tamas Varga, senior oil analyst at London brokerage PVM Oil Associates.
Libya, one of two OPEC countries exempt from the output cuts, has increased its production to 685,000 bbl/d, from around 600,000 bbl/d in December, an official at the National Oil Corp. said on Jan. 1.
Elsewhere, non-OPEC Middle Eastern oil producer Oman told customers last week that it would cut its crude oil term allocation volumes by 5% in March.
Non-OPEC Russia's oil production in December remained unchanged at 11.21 MMbbl/d, near a 30-year high, but it was preparing to cut output by 300,000 bbl/d in the first half of 2017 in its contribution to the accord.