Oil prices were steady today after hitting fresh 11-month highs on a fall in US stockpiles and in the wake of a pledge by Saudi Arabia to cut output by more than expected. 

Brent crude was up five cents to $54.35 a barrel this afternoon after touching $54.90, a fresh high not seen since before the first Covid-19 lockdowns in the West. 

US West Texas Intermediate (WTI) was up 26 cents, or 0.5%, to $50.89 after touching $51.28. 

The storming of the US Capitol by supporters of President Donald Trump yesterday appeared to have little impact, while a slight rise in global equities suggested investors believed President-elect Joe Biden would be empowered to spend more freely. 

Oil prices have been supported this week by a pledge by Saudi Arabia, the world's biggest oil exporter, to cut output by an additional 1 million barrels per day (bpd) in February and March. 

"Saudi Arabia intimately knows the relationship between the oil price and the global inventory levels. Lower inventories equal higher prices," SEB chief commodity analyst Bjarne Schieldrop said. 

"The strategy of course only works if the OPEC+ (group of oil producers) stays disciplined," he added. 
 
UBS analysts raised their forecast for Brent to $60 per barrel by mid-year, citing the Saudi output decision. 

"The Kingdom's pre-emptive move suggests to us a desire to defend prices and support the oil market amid demand concerns due to extended mobility restrictions in Europe," they said. 

US crude stocks fell and fuel inventories rose, the Energy Information Administration said yesterday. 

Crude inventories were down by 8 million barrels in the week to January 1 to 485.5 million barrels, compared to a Reuters poll showing analysts expected a 2.1 million barrel fall. 

The drop in crude stocks is a typical end of year occurrence as energy companies take oil out of storage to avoid tax bills.