Global crude prices have held above the $50 per barrel mark after Russia said it will join OPEC in cutting production.
OPEC members agreed on Wednesday to cut production by about 1.2 million bpd from a record high of 33.8 million bpd in October.
Saudi Arabia has agreed to cut production by about 500,000 bpd but will still be pumping just over 10 million bpd, Reuters said.
Iran will be permitted to boost production up to 3.9 million bpd, a nearly 300,000 bpd increase from its October level.
Iraq has agreed to trim production by about 200,000 bpd.
Indonesia has suspended its OPEC membership rather than participate in the production plan, Reuters said.
A timeline for implementing the cuts has not been disclosed yet.
Despite some missing details, global crude prices have held onto gains earned after the production plan announcement.
West Texas Intermediate was trading at $50.68 per barrel just after Thursday’s opening bell, still off from a one-year high of $52.66 per barrel in late June.
Brent crude prices climbed to a five-day high of $53.37 on Thursday, up from a closing price of $51.84 on Wednesday.
While crude prices rallied on news of the cuts, some traders expressed concern that rising U.S. rig counts could undermine OPEC production cuts.
India Oil Corp’s Director of Finance A K Sharma told Reuters that he expects any positive price impact to be “short term” and believes the OPEC cuts will be “largely offset” by growing U.S. production.
The International Energy Agency said in November that, even if OPEC members implemented a production deal, the current “considerable stock overhang that will take time to deplete.”
According to data published by OPEC last month, OECD oil inventories showed an overhang of 304 million barrels at the end of September, down from 350 million barrels at the end of 2015.
Russian Energy Minister Alexander Novak told Reuters that Russia will “gradually cut output” by as much as 300,000 bpd during the first half of 2017 as “technical capabilities allow.”
Some analysts remain skeptical that Russia will be able fulfill its end of the bargain.
Senior partner at Macro-Advisory Chris Weafer told CNBC that even if Russian officials commit to production cuts the country’s mix of private and public ownership makes it “difficult to see how they would get the companies” to comply.
Prior to the OPEC announcement, the IEA said Russia was expected to add about 200,000 bpd next year.