The freeze on oil production is happening.
With the reports claiming that the Organization of the Petroleum Exporting Countries has agreed to limit crude output in their informal meeting held in Algiers last September 26-28, oil futures got a much-needed boost from this recent talks as it jumped to a strong finish on Wednesday trading.
Oil prices climbed 6% on yesterday’s session, its biggest climb in roughly three weeks.
The international benchmark Brent crude futures added $2.72, or 5.9%, to close at $48.69 per barrel, following the almost two-week high of $48.96 in its previous session.
Its US counterpart, the West Texas Intermediate, finished $47.05 after closing 5.3% higher, gaining $2.38.
Reports said that the output freeze will limit the production of crude by 750 000 per day, the first cut since 2008, to further ease the global glut that crashed the market two years ago.
US dollar tumbled while equity markets gained ground on Wednesday as oil prices were pumped up by the closed deal on production freeze output by the members Organization of the Petroleum Exporting Countries.
The US dollar index, which measures the greenback against major currencies, was the biggest loser in the jump in oil futures as it finished roughly flat at 95.451 and dipped against commodity-link currencies.
The greenback hit a five-month low against Norwegian crown as it shed 0.8% at 1.2088. Meanwhile, it was flat against euro and the Swiss franc at 1.1212 and 0.9710 respectively.
In Wall Street, the price surge in oil pushed the stock markets in the green zone with the Dow Jones futures advancing in triple digits as it added 110.94 points, or 0.6% at 18 339.24, backed up by the huge gains from energy giants Exxon Mobil Corp.The S&P 500 index was boosted by the 4.3% climb in its energy sector and finished at 2 171.37 after adding 11.44 points or 0.55% while the NASDAQ Composite ended at 5 318.55 by adding up 12.84 points, or 0.2%.