Oil edged up in early Asia trade on Friday, with U.S. crude trading near a two-month high after OPEC agreed to increase output curbs by nearly 50 percent in early 2020, although the cartel stopped short of promising any further steps after March.
West Texas Intermediate oil futures were up by 96 cents at $59.30 a barrel.
Brent futures were up $1.14 at $64.40. They fell 0.6% on Thursday.
The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia – a grouping known as OPEC+ – have agreed to more output cuts to avert oversupply early next year as economic growth stagnates amid the U.S.-China trade war.
The agreement, which needs to be formally adopted later on Friday, will reduce 500,000 barrels per day (bpd) of production, through tighter compliance and some adjustments. The group has been withholding 1.2 million bpd and the new amount represents about 1.7% of global oil output.
The “decision seems to be more of a housekeeping move that will narrow the gap between their current target and the over-compliance we have seen from the alliance,” said Edward Moya senior market analyst at OANDA.
A panel of ministers representing OPEC and non-OPEC producers led by Russia recommended the cuts be made, according to Russian Energy Minister Alexander Novak on Thursday.
Details need to be hammered out at an OPEC+ meeting that starts later on Friday in Vienna.
Higher oil prices are also supporting the initial public offering of Saudia Arabia’s state-owned oil company, Saudi Aramco, which said on Thursday it priced the shares on sale at the top of an indicated range.
The sale was the world’s biggest IPO, beating Alibaba Group Holdings’ $25 billion listing in 2014, but fell short of valuing Aramco at $2 trillion, a target sought by Saudi Crown Prince Mohammed bin Salman.
Foreign investors stayed away and the sale was restricted to Saudi individuals and regional investors.