Brent crude oil futures rose to just under 50 a barrel on Friday as major producers agreed on a compromise to increase output slightly from January but continue the bulk of existing supply curbs to cope with coronavirushit demand.
Brent was up 53 cents at 49.24 a barrel by 1034 GMT after hitting its highest since early March at 49.92. West Texas Intermediate rose 47 cents to 46.11 a barrel. Both benchmarks are set for a fifth straight week of gains.
OPEC and Russia on Thursday agreed to ease deep oil output cuts from January by 500,000 barrels per day with further as yet undefined increases on a monthly basis, failing to reach a compromise on a broader policy for the rest of 2021.
OPEC had been expected to continue existing cuts until at least March, after backing down from plans to raise output by 2 million bpd.
The increase means the Organization of the Petroleum Exporting Countries OPEC and Russia, a group known as OPEC, are set to reduce production by 7.2 million bpd, or 7 of global demand from January, compared with current cuts of 7.7 million bpd.
The deal will ensure declining crude inventories through the first quarter, said SEB analyst Bjarne Schieldrop.
Oil demand is likely to rebound strongly in 2021 along with the rollout of vaccines. There are good reasons to be bullish for oil, he said.
But there was a risk that the new arrangement could lead to lax adherence to quotas given the gradual increases baked into it, said RBCs Helima Croft.