Oil prices rose to the highest since August and traded above $50 a barrel yesterday, following optimism surrounding the new oil production deal by the Organisation of Petroleum Exporting Countries (OPEC).
The body agreed in Algeria, in September, to cap production at not more than 33 million barrels per day.
According to Reuters, December Brent crude futures were last up 40 cents at $50.59 a barrel, off a session low of $49.74, while U.S. crude futures rose 42 cents to $48.66 a barrel, above the day’s low at $47.78.
OPEC basket of 14 crude stood at $44.63 per barrel, according to the cartel’s secretariat.
At its meeting in Algiers, OPEC set up a committee to work out the oil production level of every member country.
“The Conference opted for an OPEC-14 production target ranging between 32.5 and 33.0 mb/d, in order to accelerate the ongoing drawdown of the stock overhang and bring the rebalancing forward,” OPEC said in a statement.
“The Conference decided to establish a High Level Committee, comprising representatives of Member Countries, supported by the OPEC Secretariat, to study and recommend the implementation of the production level of the Member Countries.
“Furthermore, the Committee shall develop a framework of high-level consultations between OPEC and non-OPEC oil-producing countries, including identifying risks and taking pro-active measures that would ensure a balanced oil market on a sustainable basis, to be considered at the November OPEC Conference.”
Once the OPEC deal is implemented, oil prices are expected to rally at prices higher than $50 per barrel.