On Friday, WTI crude oil prices are gaining strength and are all set to close the week in green as OPEC and allies reached an agreement to extend deeper supply cuts to make up for the weakness in oil demand due to the pandemic. At the time of writing, WTI crude oil is trading at around $46.37 per barrel.

In their meeting on Thursday, Saudi Arabia and Russia secured an agreement to cut production by 500,000 bpd as a compromise as some of the nation’s opposed the extension over vaccine optimism. As a result of this latest decision, OPEC+ nations will curb crude production by 7.2 million bpd starting January 2021, slightly higher than the 7.7 million bpd cuts until the end of this year.

According to the earlier arrangement, OPEC and its allies were expected to increase production by 2 million bpd at the beginning of next year. However, the second wave of the pandemic that has forced countries to reimpose lockdowns and restrictions and weaken oil demand once again aided the agreement for extending deeper supply cuts for some more time.

Crude oil is also enjoying support over possible progress towards finalizing of the next round of fiscal stimulus measures in the US. According to latest news reports, Republicans seemed more accepting of a coronavirus relief package worth $500 billion, which could prop up the US economy and improve oil demand as well.