NEW YORK, Rabi'I 2, 1438, Dec 1, 2016, SPA -- Oil prices rose more than 4 percent on Thursday, with Brent crude at its highest in about 16 months, extending gains after OPEC and Russia agreed to restrict output to speed up the rebalancing of a long-oversupplied market, Reuters reported. The Organization of the Petroleum Exporting Countries agreed on Wednesday its first oil output reduction since 2008 after de-facto leader Saudi Arabia accepted "a big hit" and dropped a demand that arch-rival Iran also slash output. The deal also included the group's first coordinated action with non-OPEC member Russia in 15 years. On Thursday, Azerbaijan said it was also willing to engage in talks on cuts. Despite the historic deal, doubts were widespread in the market. Brent was trading at about $50 a barrel after the announcement, and we expect it to trade at an average of $55-$60 per barrel in 2017. Benchmark Brent futures for February delivery jumped as much as 4.8 percent to $54.36 a barrel, the highest since July 30, 2015. By 11:43 a.m. EST (1643 GMT), Brent was up $2.21, or 4.3 percent, at $54.05. U.S. crude rose $1.98, or 4 percent, to $51.42, after rising to a high of $51.72 a barrel, about 20 cents below its 2016 high. U.S. refined products also rose along with crude - ultra low sulfur diesel (ULSD) futures soared as much as 5.5 percent to its highest in more than a year while gasoline futures jumped about 6 percent. The OPEC deal also triggered frenzied trading, with Brent futures trading volumes for February and March - when the supply cuts should start to be visible in the market - hitting record volumes. The Intercontinental Exchange Inc also said ICE Brent crude futures hit a daily volume record of 1.96 million contracts on Wednesday. Oil prices are still only at September-October levels - when plans for a cut were first announced - and crude prices are less than half mid-2014 levels, when the oil price began to collapse to its lowest in a generation. OPEC produces a third of global oil, or around 33.6 million bpd, and the deal aims to reduce output by 1.2 million bpd from January 2017, similar to January 2016 levels. -- SPA 20:05 LOCAL TIME 17:05 GMT www.spa.gov.sa/w281343