Oil futures endured a roller coaster session on Thursday (29 September) after major Opec producers led by Saudi Arabia surprised the market by agreeing to curb excess production at the sidelines of the ongoing International Energy Forum in Algiers.

At 5:01pm BST, the Brent front month futures contract was trading 1.62% or 79 cents higher at $49.48 per barrel, while the West Texas Intermediate was up 1.91% or 90 cents to $47.95 per barrel. Both benchmarks rose 5% at point during Asian trading, only to register declines of over 1.5% as the rally lost steam.

However, bulls had the upper hand in European intraday trading, as oil futures spiked yet again with traders factoring in a huge overnight decline in US oil inventories.

In a scheduled data release, the Energy Information Administration (EIA) – statistical arm of the US Department of Energy – reported a 1.9 million barrel decline in commercial crude inventories to a total of 502.7 million barrels.

Earlier in the session, reports from Algiers suggested Opec had agreed to limit production to a range of 32.5 million to 33 million barrels per day (bpd) led by the Saudis; dubbed the first cut since 2008. However, details remain sketchy with Opec ministers saying they would not decide on targets for each country until the cartel's next meeting at the end of November.

Deutsche Bank analyst Michael Hsueh said eventual impact is hard to ascertain until Opec publishes its formal stance with little formal information available of members' quotas.

"Opec's individual country quotas have not been published since the 17 December 2008 Oran Agreement. Furthermore, since the precise country level production quotas will not be decided until the Opec meeting [in Vienna on 30 November], countries may not act to reduce output until December."

Bjarne Schieldrop, chief commodities analyst Nordic bank at SEB, said: "While a curb from Opec will balance the market quicker than what would otherwise have been the case, the cartel is running a dangerous game if the aim is to push the crude oil price higher from here in the short term as it would just activate more US shale oil production.

"That would make it difficult for Opec to place potentially curbed volumes back into the market at a later stage. Also, Opec members still have a headache: what to do if volumes from Libya and Nigeria were to revive? Who should cut back production to make room for them? What seems clear to us is that it is not going to be all easy sailing for Opec from here even if they have now managed to reach an internal agreement."

Away from the oil market, precious metals were largely in negative territory, excepting silver. At 5:36pm BST, the Comex gold contract was down 0.11% or $1.20 to $1,322.50 an ounce, while spot platinum fell 0.05% or 43 cents to $1,029.31 an ounce. However, the Comex silver contract posted an uptick of 0.41% or 8 cents to $19.20 an ounce.