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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Oil keeps rising after OPEC output deal

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Oman oil surges $4.64; MSM closes 102 points higher


MUSCAT/LONDON: Oil swept to a six-week high on Thursday after Opec agreed to cut crude output to help clear a glut.


The Organization of the Petroleum Exporting Countries on Wednesday agreed to its first output cut since 2008, finally taking action after global oil prices fell by more than half in the last two years.


Non-Opec Russia will also join output reductions for the first time in 15 years.


US crude oil added to overnight gains of 9 per cent to reach $50 a barrel for the first time since October.


Brent crude, which soared $5 overnight, touched a six-week peak of $53.85 a barrel.


The price of Oman oil too rose on Thursday by $4.64 from Wednesday’s $45.07 to $49.71 at the Dubai Mercantile Exchange.


All eyes are now on whether the Opec deal will hold together. If the bounce in oil prices gathers pace after the Opec deal it was expected to have a broad implication on the global economy.


Brent is off the 12-year low of $27 per barrel marked in January but still less than half of where they were in 2014. Economists expect a further recovery in crude to bode well for oil-exporting economies, while potentially easing deflationary pressures in developed economies locked in a battle against falling prices.


Opec’s output cut is also seen as a boon for US shale producers, rivals to the oil cartel. The S&P energy index jumped nearly 5 per cent on Wednesday.


“The question is whether this (production cut) is going to put a floor under the oil price from here. The answer to that could well depend on what happens with the global economy in the coming year,” said Simon Smith, Chief Economist at FXPro.


Opec’s decision also triggered euphoria in the stock market. The Muscat Securities Market (MSM) general index (30) on Thursday added 102 points closing at 5,590.16 points.


In US, strong gains by petroleum-linked equities helped lift the Dow early trading, but the Nasdaq fell again on weakness in technology shares.


Dow members ExxonMobil and Chevron gained 1.0 per cent and 2.3 per cent, as US oil prices pushed above $50 a barrel following deal. — Reuters/ONA


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