Oil prices held on and were near their highest level in eleven months. That was happened on Friday. The commodity is also on track for a strong weekly gain. This is because of Saudi Arabia's promise to cut production to continue to support market sentiment.

Brent crude reportedly rose as much as 13 cents or 0.2% to $54.51 a barrel. Earlier, the commodity briefly touched $54.90 on Thursday. For information, it was the highest achievement since February last year.

U.S. West Texas Intermediate (WTI) also jumped 14 cents or 0.3%. WTI closed at $50.97.  This means it closed up 0.4% on Thursday after also reaching its highest level since February. That highest figure was at $51.28.

Saudi Arabia is Judged to Have Made The Right Decision

From data on global markets, both benchmarks are on track to experience gains of about 5% for the week. Saudi Arabia's decision to make voluntary cuts to its production has had an impact on oil prices and continues to provide support.

This was conveyed by Hiroyuki Kikukawa, a general manager of research at Nissan Securities. The presence of strong global equities and excessive liquidity support also encouraged the purchase of new oil. However, This does not mean there is nothing to be aware of.

Kikukawa warned that oil and the stock market may be able to undergo a correction immediately. This is because their rally does not reflect current conditions for fuel demand and the global economy. This is what market participants should pay attention to.

The largest oil exporter in the world, Saudi Arabia said that it would cut production. The trimming was done with an additional 1 million barrels per day (BPH) in February and March. The statement was made by the country earlier this week.

Supply is Becoming Tighter in The Market

On Thursday, as many as seven cargoes of North Sea crude oil were bought and sold in the trading window. It is especially trading operated by Platts. That's a record number that may reflect the existence of tighter supply.

It is especially after the existence of surprising cutting rules. This is measured according to existing trade sources. Elsewhere, UBS raised its forecast for Brent. Now, that estimate becomes $60 a barrel by the middle of the year.

That followed unilateral cuts by Saudi Arabia and expectations of a sharp recovery. The expected period is on-demand in the second quarter. This is because the launch of the coronavirus vaccine gives new hope and revives the journey.

Meanwhile, the stocks in Asian rose sharply on Friday. According to the data, Japan's Nikkei peaked for three decades due to expectations of economic recovery by the end of the year. It cannot be denied that the development of vaccines is one reason.

The Oil Market May Remain Bullish

Meanwhile, the oil market is expected to remain bullish heading into February. The forecast was backed up by the Saudis' surprise promise to cut production. The opinion was echoed by Kazuhiko Saito, the chief analyst at commodities brokerage Fujitomi Co.

However, concerns over slower demand for gasoline and other fuels remain. It is mainly for regions in the United States and other parts of the world. The cause is due to a wider lockdown to contain the spread of the COVID-19 pandemic.

Such restrictions can clearly limit profits. The still-widespread pandemic claims the highest number of deaths in the U.S. The disease has killed more than 4,000 people in one day. Elsewhere, China also reported the biggest rise in daily cases in more than five months.

It is likely that Japan will also extend the state of an emergency outside the Tokyo area. U.S. fuel inventories reportedly rose last week. Gasoline stockpiles increased by 4.5 million barrels and were the biggest increase since April last year.