Oil price surges 5% as OPEC meeting agrees output cut
London: Oil prices jumped more than five per cent on Friday as big Middle East producers in OPEC agreed to reduce output to drain global fuel inventories and support the market. Benchmark Brent crude oil rose $3.48 a barrel to a high of $63.54 before easing back to around $63.20 by 1450 GMT. In early trade, Brent had fallen below $60 when it looked as if oil exporters might not agree.
US light crude rose $2.69 to a high of $54.18 a barrel before slipping to around $53.80. Prices fell almost 3 per cent on Thursday after the Organisation of the Petroleum Exporting Countries ended a meeting in Vienna with only a tentative deal to tackle weak prices. Talks with other producers were held on Friday.
Oil prices have plunged 30 percent since October as supply has surged and global demand growth has weakened. But Iran gave OPEC the green light on Friday to reduce oil output by around 0.8 million barrels per day from 2019 after finding a compromise with rival Saudi Arabia over a possible exemption from the cuts, an OPEC source said.
OPEC is seeking support from non-OPEC Russia for supply cuts. Russian Energy Minister Alexander Novak returned to Vienna on Friday after discussing the issue with President Vladimir Putin. A Russian Energy Ministry source said Moscow was ready to contribute a cut of around 200,000 bpd and sources said other non-OPEC producers could contribute a further 200,000 bpd of output cuts,
OPEC President Suhail al-Mazrouei during a meeting in Vienna, Austria on Friday.