Oil futures rose on Friday after OPEC and other major producers agreed to extend their production curbs in a widely expected move aimed at ending a persistent glut in global supplies, Reuters reports.
The Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers led by Russia on Thursday agreed to maintain the output cuts until the end of 2018, while also signalling a possible early exit from the deal if the market overheats.
U.S. crude futures were up 18 cents, or 0.3 percent, at $57.58, as of 0514 GMT. Brent February crude futures rose 24 cents to $62.87.
Analysts had earlier said the nine-month extension was already priced in. Over November, Brent rose about 3.6 percent and U.S. West Texas Intermediate crude (WTI) gained about 5.6 percent as traders pushed up prices in anticipation of the cuts being extended past their scheduled expiry in March 2018.
“Oil prices are likely to hover around current levels till next June, when stockpiles would be optimized through continued production cuts, but the market will likely tighten after that,” said Kiyoshi Homma, a director at Idemitsu Kosan.
The deal cuts 1.8 million barrels a day (bpd) from the market to tackle oversupply and bolster prices.
Saudi oil minister Khalid al-Falih said it was premature to talk about exiting the cuts at least for a couple of quarters as the world was entering a season of low winter demand. He said OPEC would examine progress at its next regular meeting in June.
OPEC is showing “a strong commitment to normalizing inventories and also to remain data dependent, which reduces the risk of both unexpected supply surprises and excess stock draws,” Goldman Sachs said in a note.