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TOKYO (Reuters) – Oil prices rose on Friday, heading for a fifth week of gains, after major producers agreed to continue restricting production to meet coronavirus-hit demand, but the pledge fell short of targets. expectations.
Brent was up 19 cents, or 0.4%, at $ 48.89 a barrel at 0102 GMT after gaining about 1% on Thursday. West Texas Intermediate was up 18 cents, or 0.4%, at $ 45.82 a barrel.
OPEC and Russia agreed on Thursday to cut deep January oil production cuts by 500,000 barrels a day, without compromising on broader policy for the rest of next year.
“They came up with the final compromise,” said Stephen Innes, Axi’s chief market strategist.
OPEC + will meet once a month to review the conditions and the monthly increases will not exceed 500,000 barrels per day (bpd).
“These meetings will bring some volatility to the market and, more importantly, will make hedging more difficult for US growers,” Innes said.
The increase means that the Organization of the Petroleum Exporting Countries (OPEC) and Russia, a group known as OPEC +, will cut production by 7.2 million bpd, or 7% of global demand from January, compared with current cuts of 7.7 million bpd.
OPEC + was expected to continue existing cuts until at least March, after backtracking on plans to increase production by 2 million bpd.
Also supporting prices, Republicans in the US Congress took a more optimistic tone Thursday during talks on coronavirus aid as they pushed for a small $ 500 billion measure.
The funding measure was previously rejected by Democrats who say more money is needed to tackle the pandemic.
Reporting by Aaron Sheldrick; Edited by Ana Nicolaci da Costa
