Oil steadied in Asia after surging to a 10-month high on Saudi Arabia’s pledge to cut an extra 1 million barrels a day of crude output in February and March as a rampant coronavirus leads to more lockdowns. Futures in New York traded near $50 a barrel after jumping 4.9% on Tuesday. OPEC+ reached a deal following two days of talks to curb supply over the next two months. The move by Saudi Arabia, the group’s de-facto leader, paved the way for other producers to keep supplies steady and for Russia and Kazakhstan to lift output by a combined 75,000 barrels a day in both February and March.

Oil surges on surprise Saudi pledge to cut output

“The 1 million barrel per day reduction is nothing to scoff at and it will tip the market back into a supply deficit for the first quarter at least, even if demand is set to dip slightly on the new virus strain,” said Howie Lee, an economist at Oversea-Chinese Banking Corp. “The message is now loud and clear that Saudi Arabia is there to guard the fragile equilibrium in this market.”

  • West Texas Intermediate for February delivery added 0.1% to $49.98 a barrel on the New York Mercantile Exchange as of 7:48 a.m. in London
  • Brent for March settlement rose 0.5% to $53.86 on the ICE Futures Europe exchange after closing up 4.9% on Tuesday