Oil prices rose around 2% on Friday as major producers came to an agreement to prolong some production cuts to cope with demand impacted by the coronavirus crisis.

As prices are heading for a fifth consecutive week of gains, Brent rose $1.04, or 2.1%, at $49.75 a barrel following a 1% gain on Thursday. 

Meanwhile West Texas Intermediate rose 84 cents, or 1.8% to $46.48 a barrel.

On Thursday, OPEC+ agreed to ease deep oil production cuts from January by 500,000 barrels per day. However, a compromise was not reached on a broader policy for the remainder of 2021.

Following the decision, Goldman Sachs said in a report: “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.”

The increase means OPEC and Russia, known as OPEC+, are scheduled to lower production of 7.2 million barrels per day, equating to 7% of global demand from next month, compared to current cuts of 7.7 million barrels per day.

After abandoning plans to increase output by 2 million barrels per day, OPEC's de facto leader Saudi Arabia wanted to extend the present production cut for a further three months as demand remains subdued with mounting coronavirus cases reported throughout Europe and the U.S. 

However, the deal came up against resistance from Saudi Arabia's ally, the United Arab Emirates.

The UAE has expanded production capacity over the past few years that has not been taken into account when determining quotas. Abu Dhabi wanted "cheaters" such as Russia, Iraq and Nigeria to face penalties for their previous overproduction, says an Investor’s Business Daily report.