Oil prices edged up slightly on Tuesday in pre-New Year holiday trading, hitting $55.70 a barrel even as the market stuck to an optimistic view ahead of a landmark effort by oil producers to reduce global supply.

Markets were treading cautiously less than a week before the first output cut deal agreed by the Organisation of Petroleum Exporting Countries (Opec) and non-Opec members to lower production by almost 1.8 million barrels per day (bpd) kicks in on January 1, reported Malaysia Sun.

Starting January, most members of the Opec and 11 other non-cartel producers will start scaling back their production as part of a deal they made in the end of November. The reduction goal of roughly 1.8 million barrels will be carried out in phases.

London Brent crude for February delivery was down five cents at $55.11 per barrel by 0732 GMT.

The February contract for global crude benchmark brent was up 0.03 per cent at $55.19 a barrel while its US counterpart, West Texas Intermediate, gained 0.41 per cent to $53.25.

Nymex crude for February delivery was up 16 cents at $53.18 a barrel by 0002 GMT, after closing up seven cents at a 17-month high on Friday.

“Opec's output cuts are nearing, but because there's hardly any news on producers, the market is stuck in the doldrums," said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo.

Starting January, most members of the Opec and 11 other non-cartel producers will start scaling back their production as part of a deal they made in the end of November. The reduction goal of roughly 1.8 million barrels will be carried out in phases.

Oil prices have enjoyed a steady rise throughout December and some analysts believe prices will breach the $60-a-barrel threshold in the first half of 2017, stated the report.

The prices have risen steadily throughout December and analysts believe they will breach the $60-a-barrel threshold in the first half of 2017, it added.