Brent Crude Oil rose over $54 a barrel on OPEC deal

Oil prices will continue to strengthen on the deal, but sharp gains will be limited as market skepticism lingers about how effective the cuts will be.

If (the OPEC countries) make a concentrated effort to reduce there will be a balance.

Motorists are being warned to expect prices to rise at the pumps as a result.

“Had we not chose to switch to gas, we would today be anxious about how to announce a rise in the tariffs by nearly 10%”, Dr Muscat said.

“The consumer isn’t really focused on gasoline since prices remain low”.

The effect of OPEC’s deal to reduce crude output starting next month is already being felt in Saudi Arabia, the world’s biggest oil market.

“The truth is that the prime minister could have easily reduced tariffs in the past two years but he chose not to do so”.

Also, according to gas price-tracking website GasBuddy.com, stations were still selling gas as cheap as $1.89 a gallon as of Friday morning.

Analysts are now focusing their attention on implementation of the deal, the first agreement since 2001 by the Organization of the Petroleum Exporting Countries (Opec) and Russian Federation to coordinate production cuts. Azerbaijan said it was also willing to discuss cuts.

Both Goldman and Barclays said oil prices would quickly move above $50 per barrel if a production cut is agreed by OPEC.

Benchmark Brent crude for February rose $1.10 a barrel to a high of $52.94 and traded around $52.90, up $1.06 by 1315 GMT.

Brent settled at $50.47 on Wednesday, up $4.09 or 8.8%, after hitting an intra-day high of $50.49. There is still more supply than demand – the reason oil prices collapsed beginning in mid-2014.

“The decision has removed a lot of downside risk from the market and we’ll probably sniff at $60 even this year”, said Bjarne Schieldrop, chief commodities analyst at SEB AB bank in Oslo.

The plan shows one way through which producers will pass on OPEC’s first output cut in eight years to users of their supply. The U.S. has been producing higher quantities of oil and that will put pressure on OPEC to bring oil prices back down.

According to the statement, the Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, led Nigeria’s delegation at the meeting and the negotiation which led to Nigeria getting an exemption from the production cut.