Meanwhile, February Brent crude on London's ICE Futures exchange retreated 14 cents, or 0.3%, at $55.07 a barrel.
USA oil producers stand to benefit from the OPEC and non-OPEC deals if they lead to higher prices, particularly because the us hasn't agreed to limit its own output. Traders said news of the shooting raised concerns about political risks around the globe, which can be supportive for oil futures. "Trading might move more on these geopolitical concerns now that the supply situation is getting tighter", he said. In September, OPEC indicated that it was interested in formalizing an agreement to reduce the group's oil output in an attempt to stabilize oil prices, which have endured a two-year slump. Russian Federation and other non-OPEC producers plan to cut about half as much.
"While the market will eventually need to see some evidence of an actual reduction in output, talk of production cuts and notices of lower allocations sent to refiners are sufficient to support market sentiment for now", Tim Evans, Citi Futures' energy futures specialist, said in a note.
The Organization of the Petroleum Exporting Countries agreed to reduce output by 1.2 million barrels per day (bpd) from January 1, its first such deal since 2008.
Although, there has been a significant rise in the price of Oman crude, it remains almost 3 per cent less than last week, post-OPEC announcement to choke oil production.
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"Since its trough on 27 May 2016, producers have added 194 oil rigs (+61%) in the US", US bank Goldman Sachs said.
Sen. Ed Markey (D-Mass.) sent President-elect Donald Trump a letter on Monday warning him not to consider getting the USA involved in any worldwide deals to cut oil production. The Permian basin, which spans from Texas to southeastern New Mexico, is considered the most prolific oil-producing region in the U.S. Recently, some market sources claim that a buildup in USA production offsets developments like Libya's stalled oil-field relaunch.
On Nov. 30, OPEC nations agreed for the first time in eight years to lower production.
OPEC estimates that output of 32.6 million barrels per day from the cartel would balance the market.
Germany's Commerzbank cited speculative financial investors as the major contributors to the current price rally.