Investing.com – WTI crude oil prices settled nearly 5% higher Friday as OPEC's crude output hike was more modest than some producers had hoped, easing investor fears that a wave of crude supply would hold back oil prices.
On the New York Mercantile Exchange crude futures for August delivery rose 4.6% to settle at $68.58 a barrel, while on London's Intercontinental Exchange, Brent climbed 3.4% to trade at $75.55 a barrel.
OPEC agreed Friday to ease crude output limits, paving the way for fresh crude supply to enter the market, reducing the risk of a shortage in global crude stockpiles.
OPEC said it wanted countries –part of the production cut agreement – to increase production, returning to 100% compliance with agreed quotas by 1 July 2018.
The call from OPEC demanding members return to agreed quotes comes as member countries had been cutting output by more than required, pushing compliance 52% above the output curbs agreed in November 2016.
While the oil-cartel appeared reluctant to give specific numbers on quotas, Saudi Arabia said the move would equate into a nominal output rise of around 1 million barrels per day (bpd), or 1% of global supply.
Analysts said, however, that a number of producers in the OPEC-led accord would struggle to increase output, leading to a more modest boost in crude output.
"It is important to note that the market should only see a practical increase of about 600,000 barrels a day as a number of countries in the accord aren't capable of increasing production," National Alliance said.
The deal comes a day after Al-Falih said the production-cut accord – initially agreed in November 2016 – had achieved its goal of rebalancing the oil market, restoring global inventories to the five-year average.
Also helping sentiment on crude prices was a fall in US rig counts for the first time in five weeks, pointing to a possible slowdown in domestic output.
The number of oil rigs operating in the US fell by one to 862, according to data from energy services firm Baker Hughes.