Oil prices gained more than 4% during the week ending Jan. 8, following a more-than-expected OPEC+ output cut announced on Tuesday in a move to alleviate low demand and the ongoing supply glut, combined with an upward movement in the global shares.
International benchmark Brent crude traded at $55.19 at 1257 GMT on Friday, posting a 4.13% increase from Monday when traded at 0646 GMT registered at $53 per barrel.
American benchmark West Texas Intermediate (WTI) traded at $51.55 at the same time on Friday, relative to $49.52 a barrel on Monday.
Oil prices started the week on an optimistic note, spurred by expectations on a satisfactory production cut ahead of a meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies, including Russia, a group known as OPEC+.
Failing to agree at Monday's meeting on whether to keep the current 7.2 million barrels per day production level or increase the quota, the group resumed talks later on Tuesday.
The meeting ended with Saudi Arabia's voluntary reduction of its production in February and March by 1 million barrels per day (bpd).
Russia and Kazakhstan will collectively increase their output by 75,000 bpd while the rest of the group will hold output steady.
Saudi Arabia's decision brought the production cut rates to 8.125 million bpd for February and 8.05 million bpd for March, meaning that OPEC+ will reduce its output in February by 925,000 bpd and 850,000 bpd in March relative to output rates in January.
On the back of gains following the fruitful OPEC+ decision, Brent oil is now trading on average over $55 per barrel, the highest level since Feb. 26 when it traded at $55.45.
A rally in global shares also added to the bullish oil price sentiment on Friday, as the shares of Japan's Nikkei hit a three-decade high, increasing investor hopes of an economic recovery in the following months.
Prices were kept high following the seizure of a South Korea-flagged oil tanker in the waters of the Persian Gulf on Monday by Iran’s Revolutionary Guards (IRGC) for allegedly violating maritime environmental laws.
By Sibel Morrow