Oil prices held above the $50 barrier on Thursday following OPEC’s decision to carry out its first output cut in eight years.
At a meeting in Vienna on Wednesday OPEC agreed on specific targets to enact a preliminary deal struck in September designed to ease a global crude supply glut and boost prices.
Immediately after the deal, crude oil prices rose by more than 10 percent.
At 0630 GMT Thursday, after a brief dip in early Asian trade, US benchmark West Texas Intermediate for January delivery was up 70 cents or 1.42 percent at $50.14, while Brent crude for February was 81 cents or 1.6 percent higher at $52.65.
“Not only had hopes of higher prices been realised, the reputation of the OPEC has also been salvaged, prompting the surge,” said Jingyi Pan, market strategist at IG in Singapore.
“Sceptics have now placed their focus on the implementation of the OPEC deal where Saudi Arabia will be shouldering the bulk of the cut.”
The 14-member OPEC agreed to lower its monthly output by 1.2 million barrels per day (bpd) to 32.5 million bpd from January 1.