Crude oil prices were up on Thursday (June 29) compared to the previous close.
The price of Brent oil was at $47.55 up from $46.53 and U.S. WTI crude was at $45.02 from $44.04.
OPEC decided to extend cuts in oil output by nine months to March 2018, OPEC delegates said, as the producer group battles a global glut of crude after seeing prices halve and revenues drop sharply in the past three years.
The cuts are likely to be shared again by a dozen non-members led by top oil producer Russia, which reduced output in tandem with the Organization of the Petroleum Exporting Countries from January.
OPEC and non-OPEC producers on December 10 reached their first deal since 2001 to jointly curtail oil output and ease a global glut after more than two years of low prices that overstretched many budgets and spurred unrest in some countries.
With the deal finally signed after almost a year of arguing within the OPEC and mistrust in the willingness of non-OPEC Russia to play ball, the market’s focus will now switch to compliance with the agreement.
Producers from outside the 13-country group agreed on December 10 to reduce output by 558,000 barrels per day, short of the initial target of 600,000 but still the largest contribution by non-OPEC ever.
Oil prices have more than halved in the past two years after Saudi Arabia raised output steeply in an attempt to drive higher-cost producers such as U.S. shale firms out of the market.
The plunge in oil to below $50 per barrel – and sometimes even below $30 – from as high as $115 in mid-2014 has helped reduce growth in U.S. shale output.