Investing.com - U.S. crude prices jumped in early morning trade Monday as Russia confirmed that OPEC and its allies would extend their production cut agreement for nine months, while a truce in the ongoing trade conflict between the U.S. and China helped ease concerns about a slowing global economy.
New York-traded West Texas Intermediate crude futures jumped $1.75, or 3.0%, to $60.22 a barrel by 7:56 AM ET (11:56 GMT), while Brent crude futures, the benchmark for oil prices outside the U.S., soared $1.84, or 2.8%, to $66.58.
“A move towards extending the deal, along with constructive talks between Presidents Trump and Xi at the G20 summit which would see the U.S. holding off from imposing new tariffs, has proved constructive for the oil market this morning,” analysts at ING said in an early morning note.
Russian Energy Minister Alexander Novak confirmed on Monday that all members of the agreement between OPEC and non-member allies, known as OPEC+, had unanimously agreed to extend existing output cuts of 1.2 million barrels per day for a full nine months.
Novak said that “everyone supported the general proposal” and that the Joint Ministerial Monitoring Committee, that oversees compliance with the agreement, “recommended specifically this option of further cooperation”, according to a Reuters report.
The announcement comes after Iran gave its approval over the weekend and Saudi and Russian leaders met on the sidelines of the G20 summit.
OPEC has tentatively scheduled a press conference after the meeting of its members at 10:00 AM ET (14:00 GMT).
The full ministerial meeting of OPEC+ remains scheduled to take place on Tuesday.
Also providing support for oil prices, the U.S. and China agreed to restart trade talks after U.S. President Donald Trump pledged to hold off on the implementation of new tariffs and also ease restrictions on tech company Huawei in order to reduce tensions with Beijing.
China meanwhile agreed to make unspecified new purchases of U.S. farm products and return to the negotiating table.
The pause in escalating trade tensions reduces concerns that the dispute between the two countries will negatively impact the global economy and the demand for oil.
In other energy trading, gasoline futures advanced 2.2% to $1.9375 a gallon by 8:01 AM ET (12:01 GMT), while heating oil gained 2.1% to $1.9803 a gallon.
Lastly, natural gas futures fell 1.7% to $2.2684 per million British thermal unit.