Oil pro­duc­ers join forces, cut pro­duc­tion again

The News Tribune - - Business - BY AN­THONY MILLS, KIY­OKO MET­ZLER AND DAVID RIS­ING As­so­ci­ated Press

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

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

The bal­ance will come from Rus­sia and other non-OPEC coun­tries. The United States, one of the world’s big­gest pro­duc­ers, is not part of the deal.

“This is a ma­jor step for­ward,” said United Arab Emirates’ En­ergy Min­is­ter Suhail Mo­hamed al-Mazrouei, who chairs the reg­u­lar meet­ings in Vi­enna in his ca­pac­ity as Pres­i­dent of the OPEC Con­fer­ence.

Oil pro­duc­ers have been un­der pres­sure to re­duce pro­duc­tion fol­low­ing a sharp fall in oil prices over the past cou­ple of months. The price of oil has fallen about 25 per­cent re­cently be­cause ma­jor pro­duc­ers – in­clud­ing the U.S. – are pump­ing oil at high rates.

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

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