The world's two benchmark oil prices each rose more than 2% and headed twoard $60 a barrel on Monday as both traded near 18-month highs.

Global benchmark Brent crude futures as well as West Texas Intermediate crude for February delivery were rising by 2.4% at 10 a.m. ET, trading at around $58.22 and $55.05, respectively.

Prices were buoyed by implementation of the OPEC production cuts, which began on Jan. 1, and the hopes that reducing output by 1.8 million barrels a day will rebalance the current supply glut. OPEC's leading producer, Saudi Arabia, is imposing the biggest production cut, trimming output by 486,000 barrels a day. The cartel as a whole has pledged to cut production by 1.2 million barrels a day, with 11 non-OPEC oil producers, including Russia, promising to curb output by another 600,000 barrels a day.

"We increased our 2017 oil price forecast to $60 (from $52) and raised our 2017 gas price to $4 (from $3.25)," wrote Seagate Global Securities equity analysts in a note Tuesday. They, however, lowered their long-term oil and gas projections to $50 and $2.75, respectively.

While reports of the OPEC deal holding strong into the new year boosted prices, increased production from U.S. oil and gas companies as well as a stronger dollar could create headwinds for oil prices.

Domestic oil producers have already been preparing to increase production, as seen through the weekly Baker Hughes (BHI) rig count, which is seen as an important industry barometer for drilling activity across the U.S. and North America. For the week ending Dec. 30, two oil rigs were added and gas rigs climbed by three, bringing the count total up to 657, which is still 41 rigs shy from the count last year. The Seagate Global Securities analyst team notes that the rig count has increased by 61, or 10%, in the past four weeks.

"This year's rig count avoided the typical holiday slowdown, and we expect with supportive oil prices that high drilling activity will continue into the first quarter of 2017," the Seagate analysts said.

The lucrative west Texas Permian Basin saw the rig count in the region rise for the fifth consecutive week. Currently, there are 264 rigs in the Permian, which marks the most in any major domestic basin and represents an increase from 217 rigs a year ago. Oklahoma's Eagle Ford Shale has the second highest rig count this year at 46.

"We believe a normalized oil rig count is approximately 575 at $50 oil and approximately 750 at $60 oil," says Capital One Securities' Head of Sales, Trading and Research Pierre Conner III.

Meanwhile, considering that the commodity is priced in U.S. dollars, a stronger dollar could weigh on oil prices. The U.S. Dollar Index, which measures the value of the U.S. dollar relative to a basket of international currencies, was gaining by more than 1.3% during the trading session Tuesday morning.

"Should we see some dollar weakness later today or this week, that could allow this important level of $55 to be pierced once again," wrote TheStreet's Stephen Guilfoyle. "Remember, this level is a gateway to $58, which itself is a gateway all the way to $65."

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