Economy

Oil Jumps After Saudi Arabia and Russia Agree to Extend Pact

Oil Jumps After Saudi Arabia and Russia Agree to Extend Pact

Oil prices jumped by more than 5 percent on Monday after the United States and China agreed to a 90-day truce in a trade dispute, and ahead of a meeting this week of the producer club OPEC that is expected to cut supply.

America's supply growth, while helping to lower gasoline prices for consumers, is bound to hurt domestic producers as the industry grapples with transportation bottlenecks until more pipeline capacity is added later next year. WTI was up 1.21 US dollars to settle at 51.63 dollars a barrel, while Brent rose 1.68 dollars to close at 60.48 dollars a barrel.

Analysts said that Saudi Arabia would possibly not confront with Washington over oil prices. Repeated fall in oil prices from past seven weeks has pushed the crude futures downward in a bear market. Thus, Saudi Arabia suggested output be decreased in 2019 by one million barrels a day and said it is ready to curtail exports from December.

Oil prices rose slightly on Friday amid expectations of reduction of oil production and its supplies to world markets participants group OPEC+.

On January 1 this year, petrol went up with 5 cents per liter, while diesel went up with 12 cents, as part of a plan initiated by the government of François Hollande, and followed by Emmanuel Macron, in an attempt to encourage vehicle users to look for greener alternatives.

The comments underline tensions within the Organization of the Petroleum Exporting Countries ahead of this week's meeting to discuss curbing output and prolonging a supply-limiting pact with Russian Federation and other non-members into 2019.

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Novak told TASS earlier that the ministry was still undecided about its position on possible oil production cuts in 2019 under the Vienna Agreement.

Russian President Vladimir Putin said Saturday he and Crown Prince Mohammed bin Salman "have agreed to extend our agreement" to limit production as prices slump on global markets.

For example, OECD inventories are showing continued buildups, while current expectations are calling for USA shale companies to help boost total production above 12 million barrels a day next year. At the opening of Brent was trading at 59,73 per barrel, up 18 cents below the closing level ($59,91).

Both U.S. WTI and Brent, two global crude oil benchmarks, recorded their weakest month in November for over a decade, losing more than 20 percent.

The dollar is also expected to weaken because of the U.S.

The market is closely watching the planned OPEC meeting which is scheduled to hold on Thursday. Total volume traded was more than triple the 100-day average.