Investing.com - A powerful rally on oil prices paused on Thursday, as investors took stock of an agreement by the Organization of the Petroleum Exporting Countries to cut oil production.
U.S. crude oil was trading at $49.46 a barrel at 09:30 GMT, after rising as high as $50.23 earlier.
Global benchmark Brent futures were up 8 cents or 0.23% to $51.95 a barrel after climbing as high as $52.73 earlier in the session, the highest level since October 20.
Brent settled at $50.47 on Wednesday, up $4.09 or 8.8%, after hitting an intraday high of $50.49. U.S. crude ended at $49.44, up $4.21, or 9.3%.
Oil surged higher after OPEC agreed on its first production cut since 2008, aimed at reducing a global supply overhang that has seen prices more than halve since mid-2014.
The 14-member cartel is responsible for a third of global oil production, or 33.6 million barrels per day. The deal will see output cut by 1.2 million bpd from January 2017.
The group said it would reassess the effectiveness of the deal after six months.
The agreement also included coordinated action with non-OPEC members, who are expected to decrease production by 600,000 barrels a day.
Russia has said it would cut production by 300,000 barrels a day.
Saudi Arabia undertook the largest cut, slashing output by 486,000 barrels per day and dropping its demand that Iran cut its output, in a deal that was seen as a victory for Tehran.
But analysts said that the cuts are likely to cause other producers, especially U.S. shale drillers, to increase output.
Analysts are also doubtful over how the agreement will be enforced, as OPEC has no authority to make its members comply. Investing.com
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