Oil Prices in international market has jumped more than $1 a barrel after major producers agreed to put biggest ever output cut.
Media reports said The Organization of the Petroleum Exporting Countries (OPEC) and its allies finally agreed their biggest-ever output cut that spiked prices of oil one dollar per barrel.
The oil producers has agreed to cut output by 9.7 million barrels per day (bpd) to support oil prices, representing around 10% of global supply.
Brent crude LCOc1 futures rose $1.23, or 3.9%, to $32.71 a barrel by 0058 GMT after opening at a session high of $33.99.
U.S. West Texas Intermediate (WTI) crude CLc1 futures were up $1.39, or 6.1%, to $24.15 a barrel, after hitting a high of $24.74.
The energy minister of Saudi Arabia said,
The Kingdom, Kuwait and The United Arab Emirates (UAE) volunteered to make cuts even deeper than those agreed.
That would effectively bring the OPEC+ supply down by 12.5 million bpd from current supply levels.
Earlier it was decided in the meeting of OPEC+,
Oil output cuts to start on May 1 and last through June 30, followed by smaller cuts through April 2022.
Saudi Arabia-led OPEC and Russia-led non-OPEC oil producing nations started their 9th (Extraordinary) OPEC and non-OPEC ministerial meeting via webinar.
The baseline for the oil production cuts will be the oil output levels of OPEC+ members from last October.
However, heavyweights Saudi Arabia and Russia will apply the cuts based on their output of 11.0 million bpd.
While the current agreement will be valid through April 30, 2022, its extension will be reviewed in December 2021.
OPEC+ members will meet on June 10 this year via webinar again.