Oil rises 3% after Saudi gesture to extend OPEC deal and stock rise

OPEC
FILE PHOTO: A general view of the OPEC building and logo in Vienna , November 7, 2013. REUTERS/Leonhard Foeger/File Photo

UNITED STATES (VOP TODAY NEWS) — Oil prices rose nearly 3 percent on Friday, further away from a five-month low this week after Saudi Arabia said Opec was close to agreeing to extend production cuts beyond June and as US stocks rose.

Brent crude futures rose $ 1.62, or 2.6 percent, to settle at $ 63.29 a barrel. US crude futures closed at $ 53.99 a barrel, up $ 1.40, or 2.7 percent.

Brent fell for the third week in a row, down about 2 percent, while West Texas Intermediate rose about 1 percent over the week. On Wednesday, both benchmark crude prices hit their lowest level since January.

Saudi Energy Minister Khalid al-Falih told a conference in Russia that the Organization of Petroleum Exporting Countries (OPEC) and its allies would extend oil production cuts.

While OPEC is close to reaching an agreement, more talks are needed with non-OPEC members involved in the agreement to cut production by 1.2 million bpd, which expires at the end of this month, he said.

Oil prices also supported a rally in equity markets after a sharp slowdown in US job growth, boosting hopes that the Federal Reserve will cut interest rates.

“What we have seen is that global central banks are ready to face a slowdown in the economy,” said Phil Flynn, an analyst at PricewaterhouseCoopers in Chicago. “In the US, if that is the case, we will see more stimulus added to the market.”

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