Oil prices closed higher lower on Thursday, after a group of major oil producers agreed to extend supply cuts through the end of next year.
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Light, sweet crude for January delivery inched up 10 cents, or 0.2%, to $57.40 a barrel on the New York Mercantile Exchange, after three straight days of losses. Brent, the global benchmark, advanced 46 cents, or 0.7%, to $63.57 a barrel.
The Organization of the Petroleum Exporting Countries, along with a host of outside producers including Russia, agreed to continue to curb output for an additional nine months on Thursday, extending a deal that was set to expire in March 2018.
"This is well within expectations," said Ric Navy, senior vice president for energy futures at RJ O'Brien & Associates LLC. "The surprise would have been if they did anything different than that."
Prices swung between losses and gains throughout the day as traders digested the terms of the deal. Ahead of the announcement, some traders speculated that Russia could upend plans by declining to cut production through the end of next year. In the final agreement, members decided to review the status of the oil market at a meeting in June.
"Today's oil price reaction is a sign they have come together and put some type of stability in the market," said Nicholas Koutsoftas, portfolio manager at Cohen & Steers. "I take it as very constructive."
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The new agreement will also cap production in Libya and Nigeria, two countries that were exempt from last year's deal and contributed to the uncertainty over the effectiveness of the cartel's cuts this year.
Last year, OPEC and non-OPEC members agreed to limit supply by 1.8 million barrels a day from peak October levels. Since then, the oil market has shown signs of recovery after a yearslong glut that sent prices tumbling. Last week, oil prices traded at the highest level in more than two years.
Robert Minter, investment strategist at Aberdeen Asset Management, Inc., said OPEC has reasserted its role in the market and demonstrated that it can be a steadying force.
"While a year ago we were reading stories about the death of OPEC, we've come a long way from that. It's now a much stronger organization," he said, pointing the prospect of more formal cooperation between Russia and Saudi Arabia.
Analysts had said that OPEC would need to continue the deal to keep pushing inventories down to the five-year average.
"This will probably keep the market relatively firm," said Andy Lebow, senior partner at Commodity Research Group. "Now we'll start looking at the inventory numbers."
On Wednesday, the U.S. Energy Information Administration reported that the amount of crude in storage declined by 3.4 million barrels in the week ended Nov. 24.
Meanwhile, stocks of refined oil products such as gasoline and diesel grew by more than analysts expected, weighing on the market.
On Thursday, gasoline futures fell 0.1% to $1.7184 a gallon, and diesel futures fell 1.5% to $1.8927 a gallon.
Summer Said and Benoit Faucon contributed to this article.
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(END) Dow Jones Newswires
November 30, 2017 15:31 ET (20:31 GMT)