LONDON (Bloomberg) -- Oil rose to near $52/bbl as the dollar fell and U.S. drillers cut rigs to the lowest in eight weeks. 

Futures in New York gained as much as 1.3%. The number of oil rigs in America fell to by four to 873 last week and the U.S currency slipped Monday.

Hedge funds slashed bullish bets on U.S. crude to the lowest in more than two years, showing they aren’t buying into OPEC and its allies’ production cuts just yet.

The skepticism on OPEC+ successfully re-balancing the market has left oil near its lowest level in more than a year despite the prospect that unplanned losses in Iran and Venezuela will exacerbate the group’s cuts. There’s concern that rising American supply will undo the coalition’s work. Still, U.S. crude inventories have dropped recently, and infrastructure bottlenecks could limit immediate production increases in shale fields. “The dollar’s weakness is pushing up oil today,” said Giovanni Staunovo, a commodities analyst at UBS Group AG. “The oil market will tighten beyond current bearish expectations over the coming months as Iranian and Venezuelan output is likely to fall further.”

West Texas Intermediate for January delivery was at $51.35/bbl on the New York Mercantile Exchange, up $0.15. The contract fell $1.38 on Friday. Total volume traded Monday was about 14% below the 100-day average.

Brent for February settlement added $0.34 to $60.62/bbl on London’s ICE Futures Europe exchange, after dropping $1.17 on Friday. The global benchmark crude traded at an $8.98 premium to WTI for the same month.

The Bloomberg Dollar Index, which tracks a basket of 10 leading global currencies against the U.S. currency, fell as much as 0.3% after gaining 0.7% last week. A weaker greenback makes dollar-priced commodities more attractive.

U.S. drillers will produce an average 12.06 MMbpd next year, up from 10.88 MMbpd in 2018, the Energy Information Administration said last week. Weekly crude output remains near a record high.

Surging American production has also made the Bank of Russia skeptical on the success of the OPEC+ cuts. The country’s central bank reduced its crude price outlook for next year to $55/bbl from $63/bbl as it sees the risk of the output curbs countered by a rise in U.S. shale supplies.

Oil Market News

Qatar Petroleum is buying stakes in three offshore oil blocks in Mexico from Eni, as the Arab country signs another global expansion deal after leaving OPEC. Oil products tankers jumped to the highest level in 3½ years in the Atlantic, and IMO rules to cut sulfur emissions could further increase demand for the vessels in the next two years, Morgan Stanley analysts said. Kuwaiti Oil Minister Bakheet Al-Rashidi’s resignation has been accepted, according to a person familiar with the situation. Russia will cut export duty for crude and fuel oil to $89 a ton from Jan. 1 from $135.10 in December amid declining oil prices, the Finance Ministry said.