US stocks rise as Iran supports oil output deal

NEW YORK

The U.S. stock market closed higher Wednesday as Iran said it supports the oil-output-freeze deal between OPEC and non-OPEC countries, which pushed oil prices up more than six percent.

The Dow Jones industrial average rose 1.58 percent to end the day at 16,453 points. Nasdaq technology index increased 2.21 percent to close at 4,534 points and the S&P 500 was up 1.64 percent to end the day at 1,926 points.

Iran announced Wednesday that it supports the deal between Venezuela, Saudi Arabia, Qatar and Russia that seeks to freeze individual oil production at January levels in order to trim the glut of supply in the global market and push crude prices higher.

"The decision taken so that OPEC members and non-OPEC countries freeze their production ceiling to stabilize the market and improve prices in the interests of consumers and producers is also supported by us,” Iranian Oil Minister Bijan Zangeneh was quoted as saying by Iran's energy information network Shana.

"I hope that with the efforts which have been initiated, we would witness improvement of the market’s situation in future," he added.

The oil minister said it may take a while to see the effect of the deal on oil prices, but Zangeneh said the deal is only "the beginning step".

"This is the initial step and we have to look at it positively. Everybody agrees that we have to monitor the market situation and reaction, and consult on the next steps if necessary," he added.

After the announcement, U.S. oil benchmark West Texas Intermediate (WTI) climbed 6.4 percent to $31.12 a barrel, while the global benchmark Brent crude jumped 6.9 percent to $34.83 per barrel.

Meanwhile, increasing production in industrial and manufacturing sectors in the U.S. in January helped the stock market open higher on Wednesday morning.

The U.S.' Federal Reserve said industrial production in the country increased by 0.9 percent in January, compared to the previous month that showed a revised 0.7 decline.

In addition, manufacturing production in the U.S. rose by 0.5 percent in January, from a revised 0.2 percent decline in Dec. 2015.