Oil prices hit highest levels this year

Oil prices hit highest levels this year

Oil prices climbed to their highest level this year after a report suggested Russia and Saudi Arabia have agreed to freeze production.

Brent crude rose 2.9 per cent to US$44.1 per barrel in late trading yesterday, meanwhile US benchmark West Texas Intermediate crude saw a 2.7 per cent rise to reach $41.50.

Russian news agency Interfax quoted a diplomatic source in Doha saying the two Opec countries had established an agreement to freeze output.

“The market appears to be taking a lot of support from positive statements. But this isn’t the first time the Russians have come out and made remarks related to a production freeze being imminent,” said Gene McGillian, a senior analyst at Tradition Energy.

China has seen higher vehicle sales resulting in a growing demand for gasoline there while thousands of oil industry workers in Kuwait are planning a strike.

Olivier Jakob, an analyst at Petromatrix said: “If it is not clear if the strike will last long and will have any meaningful impact on exports or domestic production, it does illustrate further the amount of pain oil producers are facing at current price levels.”