Oil spikes as OPEC+ extends output cuts through April

Oil prices climbed on Friday, extending gains from the last session as OPEC+ agreed to deter from raising output in April as they wait for better demand recovery amid the coronavirus pandemic.

Brent crude futures for May contract gained 0.9%, or 60 cents, at $67.34 per barrel, on track for a 2% gain this week. U.S. West Texas Intermediate crude futures rose 0.9%, or 56 cents, at $64.39 per barrel.

Both benchmarks rose over 4% on Thursday after OPEC and its allies extended oil production cuts into April.

Oil prices generally drop when the dollar climbs since the commodity becomes more expensive for buyers in other currencies. 

Traders were surprised that Saudi Arabia chose to maintain its 1 million bpd voluntary cut through April even though prices rallied in the last two months.

Analysts are reviewing their price estimates in consideration of OPEC’s decision to maintain supply restraint.