Oil jumped 1.7 percent Tuesday, continuing its year-end rally with support from expectations of tighter supply once the first output cut deal between OPEC and non-OPEC producers in 15 years takes effect on Sunday.
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U.S. crude prices have surged 25 percent since mid-November, helped by expectations for OPEC's supply cut and generally solid U.S. economic figures that have also bolstered equity prices.
Trading was thin on Tuesday, with less than one-third of the usual volume in futures contracts in West Texas Intermediate crude oil. With oil near $54 a barrel, U.S. crude futures are not far from the year's high of $54.51 high reached on December 12.
"Some of the doubts (in OPEC) people are showing are going to have to be put to rest," said Phil Flynn, analyst at Price Futures Group in Chicago. "There's a strong possibility that we're going to rally into the end of the year."
Jan. 1 is the official start of the deal agreed by the Organization of Petroleum Exporting Countries and several non-OPEC producers to lower production by almost 1.8 million barrels per day (bpd).
U.S. crude was up 90 cents, or 1.7 percent, to $53.92 a barrel. Brent crude rose 94 cents, or 1.7 percent, to $56.10 a barrel as of 1153 a.m. ET (1653 GMT). The global benchmark hit $57.89 on Dec. 12, highest since July 2015.
The members of an OPEC and non-OPEC committee formed to monitor the market may meet on Jan. 13, two sources said. Oil rallied further after news of the meeting, which may give an early indication of compliance with the deal.
"From January, we'll start to have a better idea about the level of OPEC production," said Olivier Jakob, oil analyst at Petromatrix.
Russian oil producer Gazprom Neft said on Tuesday it planned to increase oil production by 4.5 to 5 percent next year, less than intended before Russia joined the supply cut deal.
Major OPEC members such as Saudi Arabia and Iraq have informed customers of lower supplies. But Libya and Nigeria - which are exempt from reductions because conflict has curbed their output - have been increasing production.
Products markets outpaced crude on Tuesday, as the price of reformulated blendstock gasoline gained 2.4 percent to $1.6652 a gallon, while heating oil gained 2.9 percent to trade at $1.71 a gallon. Those contracts expire Friday; options on those contracts are expiring Tuesday.
(By Alex Lawler and David Gaffen; Additional reporting by Osamu Tsukimori in Tokyo; Editing by Hugh Lawson, Alexandra Hudson and David Gregorio)