Oil prices began the week on a positive note, as Saudi Arabia and Russia, the world’s largest producers, agreed to extend the historic OPEC deal till March 2018.
In a joint statement to journalists on Monday, Khalid al-Falih, Saudi’s energy minister and Alexander Novak, said they would do whatever it took to curb oversupply.
“There has been a marked reduction to the inventories, but we’re not where we want to be in reaching the five-year average,” Reuters quoted Falih to have said at a briefing in Beijing alongside Novak.
“We’ve come to conclusion that the agreement needs to be extended”.
Immediately after the briefing, oil prices began an upward swing to a three week high, gaining nearly $2 on the barrel.
Brent crude, the international benchmark for crude oil, gained around $1.53 to trade at $52.37 per barrel on the global market.
US oil, or West Texas Intermediate (WTI) also soared by $1.43 to trade at $49.30 per barrel.
The Organisation of Petroleum Exporting Countries (OPEC) will be meeting on May 25, 2017 in Vienna, Austria to discuss the possibility of an extension of the historic oil deal, struck in 2016.
If OPEC fails to reach a deal in May, experts predict another drastic slump in oil prices and some economic problems for the global economy.
