Oil prices are on the upswing following the news of production cuts by major crude exporters including Russia and Saudi Arabia. The demand from China is also projected to be all time high, further fueling the price trend for the commodity.

US crude futures CLc1 closed up 76 cents to $53.01 a barrel, showing a gain of 1.5 percent. Brent crude oil LCOc1 closed at 91 cents up, or 1.7 percent, at $56.01. However, it is lower than the session high of $56.43 a barrel.

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Oil prices have stayed range-bound in the previous months following the agreement among Organization of the Petroleum Exporting Countries (OPEC) members to slash production. OPEC had agreed in November to curtail production of crude by the start of the new year.

Saudi Energy Minister Khalid al-Falih said the kingdom had cut production to its lowest in almost two years. He also predicted that global demand for oil is likely to increase by 1 million barrels per day this year.

Issam Almarzooq, Kuwait's oil minister, told CNNMoney, "If we continue to see the current level of prices and the commitment of the community, as well as non-OPEC at a satisfactory level, I think we could renew it for another six months."

However, markets are still concerned whether the OPEC will be able to stick to the deal. On previous occasions, various OPEC members continued to keep high production level despite agreeing to cuts.

In response to cuts by OPEC members, the shale-oil companies in the US have increased their production levels. This countermeasure may keep oil prices subdued, despite OPEC cuts.

Tagsopec, shale, crude oil