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TOKYO: Oil prices rose about 2% on Friday, heading into a fifth week of gains, as major producers agreed to a pledge to continue some production cuts to meet coronavirus-hit demand, though They did not meet expectations.
Brent was up 93 cents, or 1.9%, at $ 49.64 a barrel at 0748 GMT after gaining about 1% on Thursday. West Texas Intermediate rose 76 cents, or 1.6%, to $ 46.40 a barrel, after rising nearly 1% the previous session.
OPEC and Russia agreed on Thursday to ease deep cuts in January oil production by 500,000 barrels a day, but failed to compromise on broader policy for the rest of next year.
“OPEC + overcoming the hurdle of exiting its current cuts in a coordinated manner … reinforces our conviction of a steady and sustainable rebound in oil prices through 2021,” Goldman Sachs said in a report after the decision.
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 backing down on plans to increase production by 2 million bpd.
Also supporting prices, a $ 908 billion bipartisan coronavirus relief plan gained momentum in the United States Congress on Thursday.
Near delivery Brent crude futures trade at a premium for future months, a structure called backwardation, which generally points to a tightening of supply and suggests a reversal of excess fears. – Reuters
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