Oil prices jumped to their highest level in a year on Monday after OPEC and non-OPEC producers agreed to cut their daily output considerably in a bid to ease a protracted global supply glut.

The agreement between OPEC and a number of other oil-producing nations including Russia was the first joint action since 2001, following more than two years of low prices that strained many governments' budgets.

Brent crude for February deliveries rose 5 percent to $56.94 (53.72 euros) per barrel, while US crude spiked a similar amount to $54.07 (51.02 euros) per barrel in early Asian trade before trimming earlier gains.

Rising 'reflation' expectations

Eleven non-OPEC nations had said they would pump more than half a million fewer barrels a day from next month which would contribute to the Organization of the Petroleum Exporting Countries' own output cut initiative unveiled on November 30.

"This is a very powerful message that producers want to balance the market higher," IG market strategist Chris Weston told the AFP news agency. "As a statement of intent, this is about as bullish as it gets."

The spike in oil prices came in the wake of a renewed focus on inflation. The recent developments look likely to help the European Central Bank come closer to its own inflation target of little under 2.0 percent for the 19-member eurozone.  So far, the bloc's annualized inflation rate to November stands at only 0.6 percent.

hg/jd (dpa, Reuters, AFP)