Oil rises 14% on OPEC pact

MUSCAT: Increasing global crude prices are a positive sign, but they still need to reach at least $65 per barrel, an oil firm official and an economist said.

As Oil Producing and Exporting Countries (OPEC) breathed new life into crude last week with an agreement to cut produc- tion for the first time since 2008, crude has spiked 14 per cent, ending on Friday at a 17-month high of $51.68 per barrel.

“The price rise is a good thing. However, a price of around $65 per barrel is the needed one. Currently, we are suffering a loss in production costs,” Mohammed Khalid, the country manager of Descon Engineering, an oil and gas firm in Oman, told

The OPEC decision marks a significant shift in the Saudi Arabia-led cartel’s two-year price war against US shale.

Investors are betting that OPEC’s decision to stop flooding the world with oil will ease the supply glut that caused prices to collapse.

On Friday, Oman crude was traded at $51.45, while last Thursday, Oman’s oil price increased by 4.07 to reach $49.71 per barrel after the OPEC agreement.