Oil prices have edged up by 2% after major producers group decided to continue some production cuts to support prices, which were severely affected by the Covid-19 pandemic.

However, the amount of output cuts agreed by the group falls short of analysts’ expectations.

Brent crude futures were up by $1.04 to $49.75 a barrel, while the US West Texas Intermediate (WTI) crude futures rose $0.84 to reach $46.48 a barrel, Reuters reported.

On 3 December, the Organization of the Petroleum Exporting Countries (OPEC), and allies including Russia, together known as OPEC+, agreed to ease production cuts from January by 500,000bpd.

Following the news of OPEC’s decision, Goldman Sachs stated: “OPEC+ clearing the hurdle of exiting its current cuts in a coordinated way … reinforces our conviction in a steady and sustainable rally in oil prices through 2021.”

Starting from next month, OPEC+ is set to reduce production cut to 7.2Mbpd from the current levels of 7.7Mbpd.

In a press statement, OPEC said: “In light of the current oil market fundamentals and the outlook for 2021, the meeting agreed to reconfirm the existing commitment under the DoC decision from 12 April 2020, then amended in June and September 2020, to gradually return 2Mbpd, given consideration to market conditions.”

Meanwhile, a bipartisan $908bn Covid-19 relief aid plan received US Congress support, contributing to oil prices.