Global oil benchmark, Brent crude, extended its rally on Sunday to hit the $50 per barrel mark, the third time this year.
Oil prices have been on an uptrend since the Organisation of Petroleum Exporting Countries decided to cut output for the first time in eight years.
Brent, against which half of the world’s oil is priced, had risen to around $48 per barrel on Wednesday after OPEC agreed to reduce production, compared to $45 earlier that day.
It stood at $50.19 per barrel as of 4.53pm Nigerian time on Sunday, up from around $49.66 per barrel on Thursday.
OPEC agreed to cut production to a range of 32.5 million barrels per day to 33 million bpd from around 33.5 million bpd.
The 14-member oil cartel said the move was aimed accelerating the ongoing drawdown of the stock overhang and bringing the rebalancing forward.
It took into account current market conditions and immediate prospects and concluded that it is not advisable to ignore the potential risk that the present stock overhang may continue to weigh negatively well into the future, with a worsening impact on producers, consumers and the industry.
OPEC decided to establish a high-level committee, comprising representatives of member countries, supported by the OPEC Secretariat, to study and recommend the implementation of the production level of the member countries.
It said the committee would develop a framework of high-level consultations between OPEC and non-OPEC oil-producing countries, including identifying risks and taking pro-active measures that would ensure a balanced oil market on a sustainable basis, to be considered at the November OPEC Conference.
Brent had on August 18 hit a high of $50.69 per barrel amid expectations of a possible freeze in production levels.
Many OPEC members, including Nigeria, have been hurt badly by a collapse in oil prices over the last two years. While some Gulf oil exporters have very low output costs, other producers such as Iran and Venezuela need oil prices above $100 to balance their budgets.
Brent crude had on June 8 climbed by as much as 2.1 per cent to touch $52.54, the highest price since last October.
But it later fell to as low as $43 on July 27 after official United States energy data showed an unexpected glut of oil in storage.
Oil prices had rallied from lows of under $28 per barrel in January to trade above the $50 per barrel mark in June, spurred by a string of international oil production outages in the second quarter that offered temporary respite from the global glut.