NEW YORK: Global oil prices hit fresh five-month highs on Tuesday, piercing $44 a barrel and extending earlier gains after a report that Saudi Arabia and Russia have agreed to freeze output ahead of a much-anticipated producers meeting on Sunday.
Russia’s Interfax news agency quoted a diplomatic source in Doha saying that Russia and Saudi Arabia reached a consensus on Tuesday about an output freeze and that the final decision will not depend on Iran.
Brent crude rose by as much as 71 cents, or 1.6 percent, to touch $44 a barrel in the three minutes after the report was released around 1430 GMT.
By 1523 GMT, prices extended those gains and were up $1.28, or 2.9 percent, at $44.06 a barrel.
US crude was up $1.09, or 2.68 percent, at $41.45 a barrel, just shy of $41.58, its highest since March 22.
Oil markets were already boosted ahead of the much-anticipated meeting between members of OPEC plus outside producers in Doha, Qatar, on Sunday to discuss freezing output, but the comments fueled hopes that oil producers will agree on steps to tackle a supply glut.
Analysts and traders remained somewhat skeptical about the news, citing that while bullish players appear to be driving the market higher on a global supply-demand rebalancing, the threat of record-high inventory levels and producers bringing new oil once prices rebound continued to loom over the market.
Oil prices hit fresh 5-month highs
