Oil is back above $50 and has now hit its 100-day moving average.
The 100-day average is technically considered a level of support, although crude has struggled to stay above that mark this year as this chart shows.
The last time oil reached the level was April 19 and before it slid to a 2017 low of $US43.76 a barrel this month.
Oil got a boost after Khalid Al-Falih, Saudi Arabia’s energy minister, said all producers participating in a deal to limit output, agreed to extending the cuts by nine months. The cuts began this year after OPEC joined with 11 non-members in December to trim supply by as much as 1.8 million barrels a day.
That initially boosted oil prices to around $US50 a barrel though the fuel has come under pressure as US shale producers began expanding.
An extension of the cuts to the first quarter of 2018 should trim global stockpiles to a five-year average, Khalid Al-Falih said. OPEC and other global producers such as Russia had agreed to reduce production in the first six months of this year, and the decision to extend the cuts will be taken when they meet in Vienna at the end of the month.
Inventories in OECD countries were just above 3 billion barrels in April. That is about 307 million barrels above the five-year average, according to data from the U.S. Energy Information Administration.
A short while ago crude climbed 0.9% to $51.1 per barrel, extending Friday’s 2% advance. The Brent front-month contract is now 15.7% higher than its May 5 low.
Business Insider Emails & Alerts
Site highlights each day to your inbox.