Oil Jumps Over 2% as Saudi Arabia, Russia Back Supply Cuts

Oil prices rose more than $1 a barrel on Monday, with OPEC and its allies on track to extend supply cuts until at least the end of 2019 at their meeting in Vienna this week.

Front-month Brent crude futures , for September, touched an intraday high of $66.63 a barrel and were up $1.72, or 2.7%, at $66.46 a barrel by 0639 GMT.

Russian President Vladimir Putin said on Sunday he had agreed with Saudi Arabia to extend existing output cuts of 1.2 million barrels per day (bpd) by six to nine months.

Saudi Energy Minister Khalid Al-Falih said the deal would most likely be extended by nine months and no deeper reductions were needed.

“While this needs to be ratified by the remaining members of the OPEC+ group, this appears to be a fait accompli,” ANZ analysts said in a note.

Meanwhile, financial markets were buoyed by a thawing of US-China relations after leaders of the world's two largest economies agreed on Saturday to restart trade talks.

Still, Citi analysts saw the announcements as a temporary truce to de-escalate the trade and tariff war, and were skeptical that both sides can reach a deal soon even though 90% of the trade deal has been completed.