Investing.com - Oil prices jumped nearing midday trade on Friday, extending weekly gains, as the Organization of Petroleum Exporting Countries (OPEC) agreed to a modest increase in oil production.
New York-traded West Texas Intermediate crude futures gained $2.58, or about 4.0%, to $68.12 a barrel by 11:45AM ET (15:45GMT).
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., traded up $1.57, or 2.2%, to $74.62
Friday’s gains lifted the weekly rise in West Texas to 4.7%, while Brent lagged with an increase of 1.6%.
In OPEC’s 174th official meeting on Friday, Saudi Arabia was able to convince Iran to agree to an output increase of about 1 million barrels per day (bpd), or 1% of global supply, despite Tehran’s initial opposition.
As OPEC explained in the joint press release, its members had exceeded the required level of conformity to the November 30, 2016 agreement to curb production by 1.2 million bpd.
Having reached 152% compliance in May 2018, OPEC agreed Friday to strive to drop that compliance to 100%.
The cartel noted that there were no specific allocations for individual members, as some countries that did not have spare capacity would be unable to increase output.
According to Nigerian oil minister Emmanuel Ibe Kachikwu, the end result of the production increase would amount to about 700,000 additional bpd, while Iraq’s energy minister Jabbar Alluaibi estimated that the real increase will be 770,000.
The 2016 agreement also included a pact with non-OPEC members led by Russia for a total production curb of 1.8 million bpd.
All 24 members of the OPEC and non-OPEC production group, including Russia, are scheduled to meet on Saturday, while the cartel itself has scheduled its next official meeting for December 3.
Later on Friday, attention will shift to U.S. production as Baker Hughes releases its weekly data on U.S. drilling activity. Last week, U.S. drillers added one oil rig, bringing the total count to 863, the highest number since March 2015.
Lastly, natural gas futures traded down 1.4% to $2.933 per million British thermal units.
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