Oil prices rose more than 1% on Friday, extending gains from the previous session, after OPEC and its allies agreed not to increase supply in April as they await a more substantial recovery in demand amid the coronavirus pandemic.
Brent crude futures for May rose 83 cents, or 1.2%, to $67.57 a barrel at 0609 GMT, and was on track for a 2% gain in the week. U.S. West Texas Intermediate (WTI) crude futures were up 77 cents, or 1.2%, to $64.60 per barrel.
Both contracts surged more than 4% on Thursday after the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, extended oil output curbs into April, granting small exemptions to Russia and Kazakhstan.
“It just goes to show how much of a surprise the OPEC+ discipline is,” said Michael McCarthy, chief market strategist at CMC Markets. Investors were surprised that Saudi Arabia had decided to maintain its voluntary cut of 1 million barrels per day through April even after oil prices rallied over the past two months. “An array of factors coalesced to bring the parties together, but the resultant price increase will almost certainly push the parties to change their minds when they meet again on April 1, 2021,” commodity. [Reuters]