Abu Dhabi: Oil prices jumped on Monday as Opec and its allies are set to announce the extension of the six month old production cut agreement to the rest of the year to balance oil markets and shore up prices.
Brent was up by 2.78 per cent at $66.54 (Dh224) per barrel at 11.20am UAE time with West Texas Intermediate at $60.06 per barrel, up by 2.72 per cent.
Saudi Arabia’s energy minister Khalid Al Falih as well as Russian president Vladimir Putin confirmed the deal would be extended in its current form and with the same volumes.
Opec and its allies are currently cutting production by 1.2 million barrels per day to rebalance oil markets in terms of demand and supply and support oil prices till the end of June.
The deal is expected to be extended by six to nine months by Opec member countries during a meeting in Vienna on Monday.
The development pertaining to the extension of the deal come as oil prices continue to be under pressure on demand concerns due to US-China trade war as well as rising global oil inventories following record oil production from the US.
“I’m for an extension, I think it’s needed for the current conditions of the market,” UAE’s energy minister Suhail Al Mazroui, told reporters in Vienna. “So I’m expecting a rather easier meeting.”
(With inputs from Bloomberg)