Oil hits 18-month highs as markets eye output cuts

Oil prices hit 18-month highs on Tuesday, the first trading day of 2017, buoyed by hopes that a deal between OPEC and non-OPEC members to cut production, which kicked in on Sunday, will drain a global supply glut.
Benchmark Brent crude LCOc1 jumped more than 2 percent to a high of $58.37, up $1.55 a barrel and its highest since July 2015. By 0940 GMT (4:40 a.m. ET), Brent eased slightly to trade at $58.22, up $1.40.
U.S. light crude oil CLc1 hit an 18-month high of $55.24, up $1.52 a barrel, also its highest since July 2015.
Oil futures markets were closed on Monday for New Year public holidays.
Jan. 1 marked the official start of a deal agreed by the Organization of the Petroleum Exporting Countries and other exporters such as Russia to reduce output by almost 1.8 million barrels per day (bpd).
"First signals suggest the OPEC and non-OPEC production cuts are raising hopes that the global oil oversupply will diminish," said Hans van Cleef, senior energy economist at ABN AMRO Bank N.V. in Amsterdam.
Ric Spooner, chief market analyst at CMC Markets, agreed:
"Markets will be looking for anecdotal evidence for production cuts," he said. "The most likely scenario is OPEC and non-OPEC member countries will be committed to the deal, especially in early stages."
Libya, one of two OPEC countries exempt from the output cuts, has increased its production to 685,000 bpd, from around 600,000 bpd in December, an official at the National Oil Corporation said on Sunday.

Elsewhere, non-OPEC Middle Eastern oil producer Oman told customers last week that it would cut its crude oil term allocation volumes by 5 percent in March.
Non-OPEC Russia's oil production in December remained unchanged at 11.21 million bpd, near a 30-year high, but it was preparing to cut output by 300,000 bpd in the first half of 2017 in its contribution to the accord.

U.S. House Republicans weaken ethics body as they return to Congress

Republicans in the U.S. House of Representatives agreed on Monday to weaken a nonpartisan ethics watchdog on the grounds it had grown too intrusive, prompting Democrats to charge they were scaling back independent oversight ahead of a new legislative session.As they returned to Washington following a holiday break, House Republicans voted in a closed-door meeting to place the Office of Congressional Ethics under the oversight of the House Ethics Committee, giving lawmakers greater control over an independent body charged with investigating their behavior.
The measure was added to a broader rules package that is expected to pass when the House formally convenes on Tuesday.
The ethics office was created in 2008 following several corruption scandals, but some lawmakers have charged in recent years that it has been too quick to investigate complaints lodged by outside partisan groups.
The body will now have to deliver its reports to lawmakers, rather than releasing them directly to the public, according to a summary released by Republican Representative Bob Goodlatte. It will be renamed the Office of Congressional Complaint Review.
"The OCE has a serious and important role in the House, and this amendment does nothing to impede their work," said Goodlatte, who sponsored the measure.
House Democratic leader Nancy Pelosi, who created the ethics office while House speaker following complaints that lawmakers were unable to effectively police themselves, said Republicans were eliminating the only independent body charged with monitoring their actions.
"Evidently, ethics are the first casualty of the new Republican Congress," Pelosi said in a statement.
 The move comes as Republicans who control both chambers of Congress are poised to repeal major portions of President Barack Obama's health and environmental regulations and enact a conservative agenda once Republican President-elect Donald Trump takes office on Jan. 20.