Oil prices jumped as much as 6% on Wednesday after OPEC sources said the group has reached a deal to limit crude output at its policy meeting in November.
Brent crude LCOc1 was up $2.76, or 6%, at $48.73 a barrel by 2:28 p.m. EDT (1820 GMT), after reaching a more than two-week high of $48.96.
U.S. West Texas Intermediate crude CLc1 rose by $2.35, or 5.4%, to $47.02, peaking at $47.45, its highest since September 8.
The Organization of the Petroleum Exporting Countries has agreed to limit production to 32.5 million barrels per day, OPEC sources said after talks held by the group on the sidelines of the September 26-28 International Energy Forum in Algiers. The latest production figure for the group is 33.24 million bpd.
After reaching that target, OPEC will seek support from non-member oil producers to further ease the global glut, the sources said.
“This was unexpected for sure … no one that I know of saw it coming. The market doesn’t seem positioned for it. The fundamentals in the U.S. are already tighter than we expected and is due to get tighter,” said Scott Shelton, energy broker and commodities specialist for ICAP in Durham, North Carolina.