In addition, even as USA inventories of crude and products last week rose more than anticipated, a sharp increase in refining production to record highs pointed to solid demand that could also support crude prices.
Oil prices continued to rally Thursday after Saudi Arabia announced bigger production cuts than required by an OPEC deal.
The first Atlantic Council Global Energy Forum in Abu Dhabi saw Iraq ease fears on its commitment to the December Opec and non-Opec agreement to cut oil production.
"However, record-high oil exports from the south of Iraq in December and full allocations for Asian and European consumers in February are giving rise to doubts as to whether Iraq will curtail its production by 210,000 barrels per day as the terms of the agreement require".
"I am confident that the combination of capping production by 25 countries and growth of demand will continue to balance and prices will respond accordingly", he added.More news: Jamie Foxx Addresses Rumors He Was Beat Up In LA
Brent crude futures LCOc1 were up 52 cents at $54.16 a barrel by 0950 GMT, while US West Texas Intermediate crude futures CLc1 were up 44 cents at $51.26 a barrel. However, forecast increases in global production should provide downward pressure on prices and mitigate the potential for significant crude oil price increases through 2018. OPEC's extra daily capacity amounts to less than 2 million barrels, and Saudi Arabia accounts for 80% of that.
Back in the USA, the government announced plans Monday to sell up to 8 million barrels (http://www.marketwatch.com/story/us-energy-department-to-sell-up-to-8-million-barrels-from-strategic-petroleum-reserve-2017-01-09) of sweet crude oil from its Strategic Petroleum Reserve, which would add to a global market that's already oversupplied.
The deals highlight the predicament facing OPEC and other producers that have agreed to cuts, including Russian Federation and Oman.
Should the United States raise production to the extent it starts making headlines, it is highly likely this will undermine the OPEC/non-OPEC production cut by simply swallowing up its reduced market share.
Crude plunged by around 4 percent in the previous session on concerns that rising output in Iran and also Iraq were undermining efforts to curb a global fuel supply glut that has weighed on markets for over two years.
This year could see a major increase in investment in privately-held oil companies as the pickup in industrial production and an acceleration in inflation in advanced economies might lift up the overall costs of energy.