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 / Updated  / Source: Reuters
By Reuters

Brent crude oil prices rose above $55 a barrel on Monday, trading at a fresh 16-month high, as optimism spread about the prospect of a tightening market after OPEC members agreed on a landmark deal to cut production last week.

Monday's gains take the rally since the agreement was struck on Wednesday to 19 percent for Brent, the highest in almost eight years, and 16 percent for U.S. crude.

Saudi Arabia's Energy Minister Khalid al-Falih talks to journalists during an OPEC meeting in Vienna, Austria, November 30, 2016. REUTERS/Heinz-Peter BaderREUTERS

Brent crude oil futures, the global benchmark used to trade oil, soared to its highest since July 6, 2015 to $55.20 a barrel.

WTI crude oil traded up 54 cents, or 1 percent, at $52.22 a barrel.

Prices had eased slightly earlier in the session, sparking renewed buying.

"It seems that any dip is seen as a buying opportunity," said Carsten Fritsch, analyst at Commerzbank in Frankfurt.

Members of the Organization of the Petroleum Exporting Countries will this weekend meet with non-OPEC producers in Vienna to finalize a global deal to limit oil production.

From January, non-OPEC producers are expected to add an output cut of 600,000 barrels per day to OPEC's agreed 1.2 million bpd reduction.

However, one large uncertainty in the global supply balance is output from the United States, whose shale oil drillers proved more resilient than expected to weak oil prices.

U.S. energy firms extended their recovery in oil drilling into a seventh month last week, data from energy services firm Baker Hughes showed on Friday.

Overall, accounting for the recent rise in oil drilling, but also for cutbacks earlier this year on low prices, Goldman Sachs said "year-on-year production will decline by 620,000 barrels per day (bpd) in 2016 and increase by 55,000 bpd in 2017".