Reuters – 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.
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.
Brent crude futures traded 0.69% higher at $63.06 as of 0941 GMT.
Analysts had earlier said the nine-month extension was already priced in. Over November, Brent rose about 3.6% and US West Texas Intermediate crude (WTI) gained about 5.6% as traders pushed up prices in anticipation of the cuts being extended past their scheduled expiry in March 2018.
Gains are likely to be muted as inventories need to be cut further, said an official from a Japanese refiner.
“Oil prices are likely to hover around current levels till next June, when stockpiles would be optimised 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.