The price of a barrel of oil has topped $60 for the first time in more than two years on rising expectations of a renewed deal to cut supplies.
Brent crude reached its highest level since July 2015 amid signs that oil-producing countries will extend efforts to combat a supply glut.
Oil has been gradually recovering since the start of last year when it crashed close to $27 – a slump caused by weak global demand combined with an oversupply of the commodity.
The weakness of the price has badly hurt producers and prompted a major shake-up of the industry including the loss of thousands of jobs in the North Sea.
The latest milestone marks another step for the sector getting back on an even keel.
FTSE 100 stalwarts BP and Shell, mainstays of many UK pension funds, are key beneficiaries of a recovery. Both ended Friday’s session more than 1% higher.
But the upturn will be less welcome for motorists bracing themselves for price rises at the petrol pumps, with household finances already under pressure thanks to the weakness of the pound helping to push inflation to a five-year high.
The increase in the oil price comes after Saudi Arabia and Russia declared their support for extending a global deal to cut oil supplies for another nine months.
The Saudi-dominated Organisation of the Petroleum Exporting Companies (OPEC), plus Russia and nine other producers, have cut output by about 1.8 million barrels a day to try to reduce the supply glut.
The pact runs until March 2018 and the countries are now considering extending it.
Saudi Arabia’s Prince Mohammad bin Salman said this week he was in favour of doing so, following on from similar remarks from Russian President Vladimir Putin earlier this month.
Their remarks came ahead of a meeting on 30 November to be attended by oil ministers.
Source: Sky News