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It still has to be ratified at the May 25 meeting of all OPEC members, but it looks like Saudi Arabia and Russia have agree to extend current production cuts past their June expiration.

At least the oil market certainly believes that’s the case. U.S. benchmark West Texas Intermediate moved up 2.01% today to $48.80 a barrel. The international Brent benchmark rose 1.9% to $51.82 a barrel. That takes oil back to its highs of April 28.

The positive surprise in this news, as far as oil markets are concerned, is that the two countries want to extend the agreement not just for another six months but through the first quarter of 2018.

I think this is likely to set off at least a modest rally in oil prices. Traders had cut their long positions in oil and that positions the oil market for a move higher as the OPEC meeting approached. No one, I’d say, will be looking to be short oil at current prices going into that meeting.