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Brent crude futures for February rose 22 cents, or 0.27%, to
$81.08 a barrel by 1058 GMT on their first day as the
front-month Ice Brent contract.
U.S. West Texas Intermediate (WTI) crude futures rose 31 cents,
or 0.41%, to $76.27.
OPEC+ producers agreed on Thursday to remove around 2.2 million
barrels per day (bpd) of oil from the global market in the first
quarter of next year, which included a rolling over of Saudi
Arabia and Russia's current 1.3 million bpd of voluntary cuts.
OPEC+, which pumps over 40% of the world's oil, is focusing on
reducing output as prices have fallen from about $98 in late
September amid concerns over weaker economic growth in 2024.
But the market received the news with scepticism and confusion,
driven by concerns about compliance given the voluntary nature
of the reductions, as well as investors' prior expectations of
deeper cuts.
"There is probably enough in these cuts to stop a full-blown
meltdown of price but it will not stop a billowing cloud of
confusion that is going to take the oil market weeks and months
to figure out and only if the self-reporting data is indeed
reliable," PVM analyst John Evans said on Friday.
"Markets may have been pricing in another larger cut, and it
just didn’t meet those expectations," OANDA analyst Craig Erlam
added.
Investors also turned attention to macroeconomic headwinds on
the demand side.
"The only real hope for long term balance in the market is for a
dramatic improvement in global economic data as we start the new
year, that would need to come from a “soft-landing” or even
interest rate cuts," Onyx Capital Group chief executive Greg
Newman told Reuters on Friday.
Global factory data remained weak in November on poor demand,
surveys showed, as the euro zone kept contracting but mixed
signals surfaced on the Chinese economy.
(Reporting by Robert Harvey, Laura Sanicola and Sudarshan
VaradhanEditing by Frances Kerry)
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