Oil prices started Friday with increases, boosted by Saudi Arabia’s voluntary oil production cut decision to end friction between OPEC countries on output cut rates.
International benchmark Brent crude was trading at $54.74 per barrel at 0702 GMT for a 0.66% rise after closing Wednesday at $54.38 a barrel.
American benchmark West Texas Intermediate (WTI) traded at $51.16 per barrel at the same time for a 0.64% increase after it ended the previous session at $50.83 a barrel.
Prices fluctuated between $54-55 a barrel, resulting from the OPEC decision to cut production by more than expected in February and March. This move relieved markets threatened by low oil demand amid the ongoing lockdowns and strict containment measures.
Oil prices reached 11-month highs on Thursday, supported in the short term by the US clashes in the Capitol, but mainly driven by the surprise production cut decision of the Organization of Petroleum Exporting Countries (OPEC) and some non-OPEC producer countries, known as OPEC .
In order to solve the differences between OPEC member countries, some of which were in favor of higher production levels, Saudi Arabia, the de-facto OPEC leader and major driver of OPEC production cuts, said it would voluntarily reduce its production in February and March by 1 million barrels per day (bpd).
Russia and Kazakhstan will collectively increase their output by 75,000 bpd while the rest of the group will hold output steady.
OPEC is currently cutting its output by 7.2 million bpd in January.
After Saudi Arabia's voluntary reduction, the group's production cut will now be 8.125 million bpd in February and 8.05 million bpd in March, meaning that OPEC will reduce its output in February by 925,000 bpd and 850,000 bpd in March relative to output rates in January.
To positively support prices, the US first-time claims for unemployment benefits last week fell by 3,000 to 787,000, a sign that the job market is beginning its rebound from the coronavirus pandemic.