Oil spike as pro­duc­ers agree to cut pro­duc­tion

The Sunday Mail (Queensland) - - WORLD -

VI­ENNA: Oil prices spiked yes­ter­day as ma­jor oil pro­duc­ers, in­clud­ing the OPEC car­tel, agreed to cut global oil pro­duc­tion by 1.2 mil­lion bar­rels a day to re­duce over­sup­ply.

Af­ter days of meet­ings, the Or­gan­i­sa­tion of the Petroleum Ex­port­ing Coun­tries that in­cludes the likes of Saudi Ara­bia and Iraq said it would cut 800,000 bar­rels a day for six months from Jan­uary, though some coun­tries such as Iran, which is fac­ing wide-rang­ing sanc­tions from the US, have been given an ex­emp­tion.

The rest will come from Rus­sia and non-OPEC na­tions. The US, one of the big­gest pro­duc­ers, is not part of the deal.

Oil pro­duc­ers have been un­der pres­sure to re­duce pro­duc­tion fol­low­ing a sharp fall in prices in re­cent months.

The price of oil has fallen about 25 per cent re­cently be­cause ma­jor pro­duc­ers – in­clud­ing the US – are pump­ing oil at high rates.

The re­duc­tion met with the re­sponse hoped for by min­is­ters as it was at the up­per end of most pre­dic­tions.

Fol­low­ing the an­nounce­ment, Brent crude, the in­ter­na­tional stan­dard, was up $US2.79 a bar­rel, or 4.7 per cent, at $US62.85.

Bench­mark New York crude was $US2.11, or 4.1 per cent, higher at $US53.60 a bar­rel.

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