Oil prices edged up on Friday as evidence increased that producers in the Middle East were informing customers of upcoming supply cuts as part of a coordinated effort to drain a global glut.

Brent crude futures were trading at $54.11 per barrel at (12.59pm), up 9 cents from their last settlement after Kuwait hinted at making bigger supply cuts to US and European customers.

A stronger dollar makes commodities priced in the currency less attractive to investors. Futures rose after state-run Kuwait Petroleum Corporation was said to make bigger cuts to US and European customers than Asian buyers, reported Bloomberg citing a KPC official.

Crude pared losses after earlier falling 2.1 per cent as the dollar advanced after the Federal Reserve raised US interest rates for the first time in 2016.

"It’s Kuwait," said John Kilduff, a partner at Again Capital, a New York-based hedge fund that focuses on energy.

"There’s been a lot of back and fourth about the prospects for the deal. The Kuwait allocations are a reminder of their earnestness in making the deal work. It looks like the Saudis and other Gulf countries are going to do their part."

Oil has traded near $50 a barrel since the Organization of Petroleum Exporting Countries agreed November 30 to reduce output for the first time in eight years.

Oil producers including Kuwait, Saudi Arabia, and Abu Dhabi, who are key members of the Organization of the Petroleum Exporting Countries (Opec), have started notifying customers that they would cut supplies from January as part of an effort by Opec and other producers led by Russia to rein in a global fuel supply overhang and prop up prices.

Oil rose to a 17-month high on Tuesday following a broader deal reached over the weekend in Vienna with 11 non-Opec producers including Russia encompasses countries that produce about 60 per cent of the world’s crude.

Libya reopened one of its biggest oil fields and is preparing for the first time in two years to ship crude from its largest export terminal.

Brent for February settlement climbed 12 cents to $54.02 a barrel on the London-based ICE Futures Europe exchange. The global benchmark closed at a $2.05 premium to February WTI.

The Kuwaiti state oil company has informed customers it will implement cuts on crude lifting starting January 1, as it carries out crude-output reductions agreed by global producers

"Oil is holding up better than other commodities because of the Opec and non-Opec cuts," Jason Schenker, president of Prestige Economics in Austin, Texas.