Oil prices surged as much as 10 percent on Wednesday, November 30, as some of the world’s largest oil producers agreed to cut oil output for the first time since 2008 in a desperate bid to boost prices.
Brent crude futures for delivery in January were up $4.02, or 8.7 percent, at $50.40 a barrel by 1:57 p.m. ET (1857 GMT). That contract expires Wednesday. Brent crude for delivery in February was up $4.95 at $52.27 a barrel, Reuters reports.
U.S. West Texas Intermediate (WTI) crude futures rose $4.52, or 10 percent, to $49.75 a barrel. The move was the largest one-day gain since February.
The cartel agreed to cut production to 32.5 million barrels per day, Kuwait’s oil minister said. The cuts include Iraq reducing output by 200,000 bpd to 4.351 million bpd beginning in January. The country had previously resisted cuts, providing a hurdle to an agreement.
The cut was at the low end of production of a preliminary agreement struck in Algiers in September, and reduces production from a current 33.64 million bpd.
Non-OPEC member Russia has agreed to cut output by 300,000 bpd. OPEC will meet with non-OPEC producers on Dec. 9.
Saudi Arabia would contribute around 486,000 bpd by reducing output to about 10.06 million bpd, OPEC said in a press conference.
Iran committed to freezing output at 3.797 million bpd and other members would also cut production. Iran’s production was 3.69 million barrels per day in October, according to secondary sources.
OPEC had also suspended Indonesia from OPEC and hence the exact combined reduction was yet to be calculated. Kuwait, Venezuela and Algeria have agreed to monitor compliance with the OPEC agreement.
