Oil prices hit 16-month high on Opec deal effect

Crude rose above $55 a barrel to hit a 16-month high yesterday as rising prospects of a tightening market after last week’s Organization of the Petroleum Exporting Countries (Opec) agreement to cut production gave speculators impetus to increase bets on higher prices.

Yesterday’s gains take the rally since the Opec deal was struck last Wednesday to 19% for Brent and 16% for US crude.

Last week’s 12.2% rise was the largest one-week increase since February 2011.