Oil prices have jumped 2% after Saudi Arabia and Russia extended a deal to cut production until March next year.
Brent crude was up to $52.20 a barrel on an agreement to “do whatever it takes” to drive up prices. US crude futures were trading 3% firmer at more than $49 a barrel.
The rise helped push the FTSE 100 index 18.98 points higher to another all-time high of 7454.37. The Nasdaq and S&P 500 benchmarks in New York also set records.
The supply cut has helped prices recover from a low of $26 a barrel early last year.
OPEC and some non-OPEC producers, led by Russia, agreed in December to cut output by 1.8 million barrels per day for six months to help stabilise oil prices. That deal is due to expire at the end of June.
Following a meeting in Beijing today, Saudi Energy Minister Khalid al-Falih and his Russian counterpart Alexander Novak said: “The two ministers agreed to do whatever it takes to achieve the desired goal of stabilising the market and reducing commercial oil inventories to their five-year average level.”
Mr Falih added: “We’ve come to the conclusion that the agreement needs to be extended.”
The two countries produce 20 million barrels of crude oil a day – about one-fifth of global consumption – and other oil-producing nations are expected to follow their lead over cuts.
Russian President Vladimir Putin said extending output cuts for a further nine months was the right thing to do: “We support the proposal.”
One thing standing in the way of higher prices is US oil production. The number of rigs in operation has doubled over the past year.