Investing.com - Oil prices edged up on Tuesday in Asia after falling 3% in the previous session as a cut promised by Saudi Arabia and its allies in the enlarged OPEC+ failed to boost oil prices.
Crude Oil WTI Futures for January delivery gained 0.31% to $51.16 per barrel at 12:37 AM ET (05:37 GMT) on the New York Mercantile Exchange. With just three weeks to the end of 2018, WTI remains down nearly 16% on the year and 34% lower from four-year highs of nearly $77 per barrel hit in early October.
London’s Intercontinental Exchange showed that Brent Oil Futures for February delivery gained 0.3% to $60.16 a barrel. Brent remains down 10% on the year, and 31% lower from four-year highs of nearly $87 per barrel hit two months ago.
OPEC announced Friday that it would reduce overall production among its members by 1.2 million barrels per day (bpd) during the first six months of 2019 in an effort to stave off a global glut in supplies and prop up prices.
The producer club will curb output by 0.8 million bpd from October levels, while non-OPEC allies contribute an additional 0.4 million bpd of cuts, in a move to be reviewed at a meeting in April.
Oil prices jumped on Friday following the news, but gave back most of their gain on Monday, as markets are not convinced the cuts would be sufficient to end oversupply.
Edward Bell, a commodity analyst at Emirates NBD bank, said in a note on Sunday that "the scale of the cuts...isn't enough to push the market back into deficit" and that he expected "a market surplus of around 1.2 million bpd in Q1 with the new production levels."
Concerns surrounding global growth, trade war and Brexit worries were also cited as headwind for oil prices.
The tension between China and the U.S. remained high even after U.S. President Donald Trump and Chinese President Xi Jinping agreed to pause the planned increase of Jan.1 U.S. tariffs on Chinese goods, as traders worried the arrest of CFO at China’s Huawei Technologies last week would create more conflict between Beijing and Washington.
Meanwhile, U.K. prime minister Theresa May called off Tuesday’s vote on her Brexit deal so she could go back to Brussels and ask for changes to it.
The news was said to be bad news for investors, as the market judged the risk of no-deal Brexit has increased.