The OPEC oil cartel led by Saudi Arabia and allied countries agreed to a limited boost in output in the coming months during a meeting on Thursday, with member states anticipating recovering demand this year. The announcement caused oil prices to spike, with Brent crude rising nearly 1.9% to $64.63 (€54.90).

The oil-producing nations agreed to slowly increase output as the global economy recovers. The group will boost output by 350,000 barrels per day in May, 350,000 in June and 400,000 in July.

A statement released by OPEC after the meeting said that ministers have seen improvements in international markets due to stimulus packages and vaccination programs. At the same time, oil-producing countries need a "cautious and vigilant approach in monitoring market developments" following recent volatility, it added.

Prices rising again after collapse caused by COVID

Oil prices dropped to below $0 in April 2020 for the first time in history, as coronavirus-related lockdowns slashed global demand for the commodity. Prices have steadily increased since then.

The announcement to boost output comes after US Energy Secretary Jennifer Granholm tweeted Thursday that she spoke with Saudi Energy Minister Prince Abdulaziz bin Salman.

"We reaffirmed the importance of international cooperation to ensure affordable and reliable sources of energy for consumers," Granholm said in the tweet describing the call. President Joe Biden's administration may be pushing for lower prices at the pump, as midterm elections loom next year.

The US has frequently influenced Saudi Arabia on oil output and energy prices. When Russia and Saudi Arabia ramped up production last year in a price war, former President Donald Trump pushed Riyadh to cut output with Moscow, in order to protect the US shale industry.

wd/sri (AP, Reuters)