The Organization of the Petroleum Exporting Countries (OPEC) on Wednesday agreed to its first oil production limits in eight years, triggering an oil rally, but market watchers were questioning whether the oil group will cheat.
"The key to all of this is really is whether these cuts will be implemented. That is the big question,"said Matt Smith, ClipperData's director of commodity research from Kentucky.
On Wednesday,all 14 member countries reached a deal to curtail oil production for the first time since 2008, the oil-producing cartel announced from its headquarters in Vienna.
OPEC ministers confirmed it had secured a cut in its oil production from 33.8 million barrels a day to 32.5 million barrels a day in an effort to prop up prices. Oil prices have fallen by more than half since mid-2014 due to global oversupply and booming U.S. shale production.
OPEC's announcement sent crude oil prices soaring over 10 percent on Wednesday to over month highs over $50 a barrel. Crude oil prices gave up some of the gains on Thursday morning in Asia with U.S. West Texas Intermediate down 0.6 percent at $49.16 a barrel and European Brent down at 0.4 percent lower at $51.65 a barrel at 9.35am HKT/SIN time.