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Oil prices soared after agreement on oil supply was signed

by Bunkerist
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The major oil producers agreed to continue with some cuts in production, though below expectations. Oil prices surged around 2% on Friday, heading towards a fifth weekly gain.

Brent was up 93 cents, or 1.9%, at $49.64 a barrel by 0748 GMT after gaining around 1% on Thursday. West Texas Intermediate (WTI) rose 76 cents, or 1.6%, to stand at $46.40 a barrel, having risen nearly 1% in the previous session.

On Thursday, OPEC and Russia agreed to cut oil production cuts by 500,000 barrels a day in January, but could not agree on a wider policy for the rest of next year.

However, this shows that the current cuts are wanted to be exited in a coordinated manner and the belief in a stable and sustainable rise in oil prices in 2021 is consolidated.

The increase means that the group known as OPEC + is preparing to reduce the production cut in January to 7.2 million barrels or by 7% of global demand, compared to current cuts of 7.7 million barrels.

Honestly, OPEC + was expected to continue with the current cuts until at least March.

Meanwhile, the $ 908 billion coronavirus aid plan, which also supports prices, gained momentum in the US Congress on Thursday. The current Brent crude oil futures for close deliveries indicate in general tightening of supply surplus and less abundance.

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