Shafaq News/ (CNBC) Oil prices jumped around 2% on Friday, heading for the fifth week of gains, as major producers agreed on a compromise to continue some cuts to production to cope with coronavirus-hit demand even though these fell short of expectations.
Brent was up $1.04, or 2.1%, at $49.75 a barrel by 0555 GMT after gaining around 1% on Thursday. West Texas Intermediate rose 84 cents, or 1.8% to stand at $46.48 a barrel.
OPEC and Russia on Thursday agreed to ease deep oil output cuts from January by 500,000 barrels per day, but failed to come to a compromise on a broader policy for the rest of next year.
“OPEC+ clearing the hurdle of exiting its current cuts in a coordinated way ... reinforces our conviction in a steady and sustainable rally in oil prices through 2021,” Goldman Sachs said in a report after the decision.
The increase means the Organization of the Petroleum Exporting Countries (OPEC) and Russia, a group known as OPEC+, are set to reduce 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 from plans to raise output by 2 million bpd.
Also supporting prices, a bipartisan $908 billion coronavirus aid plan gained momentum in the U.S. Congress.