Crude oil prices rose sharply on Friday after Saudi Arabia and Russia agreed on further output curbs.
Positive comments on the trade deal front and upbeat U.S. jobs data contributed as well to oil’s sharp rise.
The OPEC and a 10-nation coalition led by Russia called OPEC+ have agreed to deepen oil production cuts in order to prevent oversupply in the market. The new deal agreed upon during the Vienna meet will apply for the first three months of 2020.
The move follows the recommendation of the oil exporting countries to deepen the cuts by 500,000 barrels per day to existing 1.2 million barrels per day. The total curb of 1.7 million barrels per day would amount to 1.7% of global crude supply.
Saudi Arabia’s energy minister Prince Abdulaziz bin Salman told reporters today that the kingdom’s quota would be an additional 167,000 barrels per day and that it would continue to exceed its quota by 400,000 barrels a day, thus bringing the overall production cut to closer to 2.1 million barrels a day.
West Texas Intermediate Crude oil futures for January ended up $0.77, or about 1.3%, at $59.20 a barrel, the highest settlement since September 17.
On Thursday, WTI Crude oil futures for January ended flat at $58.43 a barrel.
Crude oil futures gained as much as 7.3% in the week, the biggest weekly gain since June.
According to Baker Hughes, the number of active U.S. rigs drilling for oil fell by five to 663 this week, dropping for the seventh straight week.
The total active U.S. rig count, meanwhile, also fell by three to 799, according to the report from Baker Hughes.