Oil prices jumped to their highest levels in a year and a half on Monday after OPEC and non-OPEC producers agreed to cut oil output to ease a global glut, while the U.S. dollar extended gains before a Federal Reserve meeting this week, at which a rate hike is widely expected.
The agreement between OPEC and a number of other oil producing nations was the first joint action since 2001, following more than two years of low prices that strained many government’s budgets and spurred unrest in countries from the Middle East to Latin America.
Brent futures for February delivery rose 4.4 percent to $56.72 per barrel, with U.S. crude rising 4.8 percent to $53.98 per barrel in Asian trade. [O/R]
The jump in oil prices comes in the wake of a renewed focus on inflation after data on Friday showed a rare spike in producer prices in China, prompting investors to worry that inflationary pressures are making a come back globally.