Oil futures registered appreciable upticks on Tuesday (21 February), after Opec Secretary General Mohammed Sanusi Barkindo promised a "high" level of compliance with production cuts for 2017 unveiled by the cartel at its meeting last year.
Speaking at the International Petroleum Week in London, Barkindo said: "I am happy with the high level of compliance with production cuts promised by Opec members [on 30 November, 2016]."
The Opec official also said he remains "confident" that the market will see the high level of compliance, as currently being noted by data aggregators, not only maintained, but improved upon. Barkindo's comments followed data published overnight which appeared to suggest Russia overtook Saudi Arabia as the world's largest producer of crude oil last year.
The Joint Organisations Data Initiative in Riyadh noted on Monday, that Russia had produced 10.49 million barrels per day (bpd) in December, down 29,000 barrels a day from November, while Saudi Arabia's output fell to 10.46 million bpd from 10.72 million bpd in November.
It marks the first instance of Russia beating Saudi Arabia since March 2016. In response, at 2.47pm GMT, the Brent front month futures contract was up 1.51% or 84 cents at $57.02 per barrel, while the West Texas Intermediate (WTI) was 1.80% or 84 cents higher at $54.36 per barrel.
Fawad Razaqzada, Market Analyst at Forex.com, said, of late, oil prices have not really gone anywhere but crucially the pullbacks have been very shallow. "This suggests that despite renewed worries about supply surplus in the US, market participants are anticipating oil prices to push further higher.
"Indeed, according to traders' positioning data from various sources, net long positions in both crude contracts hit record high levels last week. It seems the risk of profit-taking is rising, the fact that these long positions have been accumulated during a time when there was no corresponding rise in prices suggests that the pressure is building for a potentially explosive move higher."
However, FXTM Research Analyst Lukman Otunuga said concealed concerns of US shale boosting oil production and negatively impacting Opec's efforts could create some headwinds in the future. "WTI crude exploded into gains on Tuesday as prices broke above the stubborn $54 resistance. If the momentum is sustainable, then the previous $54 resistance could transform into a support that opens a path higher towards $55."
Away from oil futures, the precious metals market was in a state of general retreat as the dollar partially strengthened. At 2.59pm GMT, the Comex gold futures contract for April delivery was down 0.41% or $5.10 at $1,234.00 an ounce, while spot gold was down 0.48% or $5.90 at $1,248.67 an ounce.
Elsewhere, Comex silver was down 0.32% or 6 cents at $18.05 an ounce, while spot platinum was down 0.96% or $9.65 to $995.85 an ounce.