OIL prices jumped by more than three per cent yesterday after Saudi Arabia and Russia agreed to extend said a deal to cut production until next March.
The price of a barrel of Brent Crude rose to £40.36 after talks between the two countries in China, with shares in Royal Dutch Shell A and BP up 19p to 2,164p and 5p to 465.1p respectively.
Struck last September, the original deal was due to expire later this year.
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Energy ministers from Russia and Saudi Arabia have now agreed further steps to tackle oversupply in the market by extending production cuts by nine months.
The agreement restricts production by Saudi-led Opec nations by 1.2 million barrels a day, with output from non-Opec countries, including Russia cut by 600,000 barrels.
Both sides have attempted to use the deal to boost profits and oil prices reached a five-month peak earlier this month. However, America, which is not included, has increased its output by around 10 per cent in the last year.
A statement on behalf of Saudi Arabia’s Khalid al-Falih and Russian Alexander Novak said: “The two ministers agreed to do whatever it takes to achieve the desired goal of stabilising the market and reducing commercial oil inventories to their five-year average level.”
The oil price uplift also comes after China said it would drive £95.8 billion into its Silk Road plan, which aims to unlock £1.5 trillion worth of imports over the next five years.
The infrastructure plan provides an enormous opportunity for resources firms and shares in mining giant Glencore were up 4.1p.