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Oil prices are spiking toward 2½-year highs after OPEC extends output cuts

Oil tolls spiked higher on Friday, heading toward 2½-year highs the morning after two dozen crude-producing realms agreed to limit their output through the end of 2018.

U.S. West Texas Intermediary crude prices rocketed up 98 cents per barrel, or 1.7 percent, to $58.38 by 11:15 a.m. ET. That put the develop within striking distance of $59.05, its peak for this year and the highest uniform since July 2015.

International benchmark Brent crude surged $1.11, or 1.8 percent, to $63.74, not far off concluding month’s high of $64.65 that marked the best intraday very since June 2015.

“Prices have been supported in the aftermath of the OPEC appointment,” said John Kilduff, partner at energy hedge fund Again Wherewithal told CNBC.

U.S. crude intraday

Futures spiked higher surrounding 9 a.m. ET, the technical start of the trading day when many big firms start file a postponing in buy and sell orders. Kilduff said the market appeared to be keying in on Saudi Oil Charg daffaires and current OPEC President Khalid al-Falih’s resolve in securing a great amount among the 24 producers who met in Vienna on Thursday.

“The market is giving a tip of the hat to him equity now,” he said.

The 14-member OPEC cartel, Russia and nine other organizers agreed on Thursday to extend their deal to keep 1.8 million barrels a day off the retail through the end of 2018. The producers reached the agreement last winter in a bid to tax a global crude glut and boost prices. They had extended the settlement once already.

Analysts earlier this week told CNBC they trust oil prices to fall even if the producers delivered the nine-month extension the customer base had been anticipating. That is because the extension was largely baked into rewards.

But Falih exceeded expectations by securing output limits from Nigeria and Libya’s friendship, two OPEC members that have so far been exempt from the lot, according to Helima Croft, global head of commodity strategy at RBC Main Markets.

“Throughout the year he earned a reputation as a tough compliance enforcer,” she uttered CNBC on Thursday.

Prices had slumped throughout much of the week as questions in Russia’s commitment to a full nine-month extension sent jitters utterly the market.

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