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Opec countries agree first oil output cut in eight years

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oil pump: AP

Opec countries agree first oil output cut in eight years

The oil cartel Opec has agreed its first supply cut in eight years in order to boost the price of oil.

Mohammed Bin Saleh Al-Sada, Opec’s president, said a cut of 1.2 million barrels a day would start from January.

It comes after more than two years of depressed oil prices, which have more than halved since 2014, due to a supply glut on the market.

The price of Brent crude jumped 10% to $51.94 a barrel, and US crude rose 9% to $49.53.

In addition to the production cut by Opec members, non-Opec countries will be expected to reduce production by 600,000 barrels a day, according to Mr Al-Sada.

He did not list which countries these might be, beyond saying Russia was prepared to cut 300,000 barrels from its output of more than 10 million barrels a day.

“This agreement comes from a sense of responsibility from Opec member countries and non-Opec member countries for the general well-being and health of the world economy,” he said.

The deal comes after oil ministers agreed to a cut in principle in September, which would have limited output by about 700,000 barrels a day while allowing Iran to increase production.

source : BBC

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