Oil surges on Saudi/Russian backing for output cut extension
Oil jumped by over 3% Monday as Saudi Arabia and Russia agreed on the need to rein in output for another nine months.
U.S. crude was up $1.54, or 3.22% at $49.38 at 08:15 ET. Brent crude added $1.57, or 3.09%, to $52.41.
Saudi energy minister Khalid al-Falih and his Russian counterpart Alexander Novak issued a statement saying the output cut deal should be extended to March of next year.
OPEC and non-OPEC producers have agreed to cuts of 1.8 million barrels a day in the first half.
Russia and Saudi Arabia said an extension of the deal was needed to reduce stockpiles and balance prices.
A formal decision on the extension is expected at a meeting on May 25.
Baker Hughes Friday reported a rise of nine in the U.S. rig count to 712, the highest since April 2015.
Greater U.S. shale activity has eroded the impact of output cuts by major producers.