Oil prices inched up on Monday, supported by a weaker dollar and expectations that OPEC and other producers will cut output as part of a deal to curb global oversupply.
Brent crude futures LCOc1, the international benchmark for oil prices, were trading at $55.64 per barrel at 0344 GMT (10:44 p.m. ET), up 19 cents from their last close.
U.S. West Texas Intermediate (WTI) crude futures were up 17 cents at $52.54 a barrel.
Traders said that prices were buoyed by a weakening dollar, which makes fuel purchases cheaper for countries that use other currencies domestically, potentially spurring demand.
After spending much of the second half of 2016 in an upward trend, the dollar has fallen around 2.5 percent against a basket of other leading currencies .DXY since its early-January peak.
The greenback is in particular focus for international investors this week as Donald Trump is set to take office as the next U.S. president on Friday.
“Oil pricing will be driven this week by the movement of the U.S. dollar rather than crude itself, with President-elect Trump’s inauguration … being the main event,” said Jeffrey Halley, a senior market analyst at OANDA brokerage in Singapore.
Oil also continued to receive support from an announced crude output cut from major producers including the Organization of the Petroleum Exporting Countries (OPEC) and Russia.
OPEC has said it would reduce its output by 1.2 million barrels per day to 32.5 million bpd from Jan. 1, and Russia as well as other non-OPEC members are planning to cut about half as much.
However, there is a broad expectation that OPEC will not fully implement its announced cuts, although compliance estimates of 50 to 80 percent are enough to keep crude prices supported in the mid-$50s per barrel, traders said.
Rising oil output in the United States has prevented crude prices from climbing further.
Despite a small dip in drilling last week, Goldman Sachs said it expected year-on-year U.S. oil production to rise by 235,000 barrels per day (bpd) in 2017, taking into account estimates of wells that have been drilled and are likely to start producing in the first half of the year.
Overall U.S. oil output stands at 8.95 million bpd, up from less than 8.5 million bpd in June last year and back at similar levels to 2014, when OPEC decided to start a price war against U.S. shale producers and sent the market into a tailspin.