Oil prices rose Friday after the Organization of the Petroleum Exporting Countries and other big producers including Russia agreed to keep limiting their output through the end of 2018.
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U.S. crude futures rose $1.22, or 2.13%, to $58.62 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose $1.39, or 2.22%, to $64.02 a barrel on ICE Futures Europe.
In Vienna on Thursday, OPEC and its allies agreed to extend production cuts first agreed a year ago by a further nine months. The deal to reduce global supply by nearly 2% -- in an effort to rein in a supply glut and boost prices -- had been set to expire in March 2018.
While the group's decision to extend the agreement through the end of next year was widely anticipated, doubts crept into the market in the final days before the meeting, as Russia appeared more reluctant to sign on to such a long extension.
"I think we have a little bit of a relief rally," said Lila Murphy, portfolio manager at Federated Investors.
Still, oil prices haven't jumped as much on this extension as they did when the deal was originally struck last year.
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"It's pretty much what was expected: a rollover until the end of the year. Anything more than that and they would have risked bringing on more U.S. supply, anything less and prices would have collapsed," said Thomas Pugh, commodities economist at Capital Economics.
Nigeria and Libya were also included in the production-cut agreement, with Nigeria limited to 1.8 million barrels a day and Libya limited to 1 million barrels a day. The overall deal will be reviewed in late June 2018.
Looking ahead, market participants are trying to gauge whether U.S. producers will be able to quickly ramp up to take advantage of the higher prices -- something that could undermine OPEC's efforts to drain the overhang of crude in storage. Saudi Energy Minister Khalid al-Falih described shale growth this year as manageable and moderate, and said he expects 2018 to be similar.
But some analysts say that the Saudis have underestimated the threat posed by shale producers. U.S. oil production jumped by 290,000 barrels a day in September -- a sign that higher prices have spurred output.
"We think that Khalid al-Falih's comments today suggest he may misunderstand what U.S. producers are capable of at current price levels, " Barclays analysts wrote in a note late Thursday.
Traders were also expected to monitor signs of profit-taking during December, with strong global growth, supply disruptions and geopolitical tensions in the Middle East and Venezuela expected to have at least as much influence over prices as OPEC's deal.
Gasoline futures rose 3.1 cents, or 1.79%, to $1.7610 a gallon. Diesel futures rose 5.36 cents, or 2.82%, to $1.9512 a gallon.
--Summer Said, Benoit Faucon, and Christopher Alessi contributed to this article.
Write to David Hodari at David.Hodari@dowjones.com and Alison Sider at email@example.com
(END) Dow Jones Newswires
December 01, 2017 13:15 ET (18:15 GMT)