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Oil prices SURGE as OPEC agree to SLASH production by 1.2 MILLION barrels per day

OPEC and allied oil-producing nations will cut oil output by a combined 1.2 million barrels per day from January, it was announced. OPEC will cut 0.8 million barrels per day from January with additional contributions of 0.4 million barrels per day of cuts, Iraqi Oil Minister Thamer Ghadhban said. Oil prices jumped about 5 percent to more than $63 a barrel by 15:00 GMT as the combined cut was larger than the minimum 1 million barrels per day target markets had expected. It was previously reported that Iran was seeking exemptions from a planned cut in oil production, causing OPEC talks to reach a deadlock. 

Saudi Energy Minister Khalid al-Falih had earlier cast doubt on the international organisation reaching a deal today as OPEC members met in Vienna, Austria, for a second day of discussions.

Non-member oil producers, led by Russia, met with OPEC later today.

OPEC, an intergovernmental organisation of 15 nations, is looking to slash oil production over fears of a glut in supply which has seen prices crashing globally in recent weeks.

Thursday saw OPEC tentatively agreed to slash oil output, but the final number of barrels to be slashed per day effectively rested with Russia.

Russian energy minister Alexander Novak is understood to have flown from Vienna for possible talks with President Vladimir Putin.

Four OPEC and non-OPEC sources claimed Iran, which came under fresh US sanctions in November, was also holding up a final deal.

One of the OPEC sources said: “Iran will insist on an exemption until sanctions are removed.”

Another source said Tehran wanted an OPEC communique to specify that Iran was exempt from cuts.

OPEC has come under pressure in recent weeks from United States President Donald Trump, who urged the organisation to make oil cheaper by refraining from output cuts.

Mr Trump tweeted on Wednesday: “Hopefully OPEC will be keeping oil flows as is, not restricted.

“The world does not want to see, or need, higher oil prices!”

Oil prices crept up as discussions rolled into day two, with Brent Crude and West Texas Intermediate (WTI) both seeing an increase during London trading hours.

As of 15:50 GMT, Brent Crude was trading at $63.12 per barrel, up 5.09 percent.

WTI was worth $53.70 after seeing an increase of 4.29 percent.

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