OPEC Reaches Deal To Cut Production
WASHINGTON (dpa-AFX) - The Organization of the Petroleum Exporting Countries have reached a deal to curb oil production by 1.2 million barrels per day in order to end a global glut and raise crude price.
This is the first production cut announced since 2008 when global oil prices crashed after oil producers started pumping out far more crude than required. The oil price had plunged from north of $100 per barrel down to $40 per barrel, costing major oil producers like Saudi Arabia, Iran and Iraq billions of dollars in revenues.
OPEC is an organization of 14 major oil exporters, including Saudi Arabia, Iran, and Iraq, which generates around 40 percent of global production.
OPEC nations currently produce about 33.7 million barrels of oil per day. Under the new agreement, the production will be brought down to 32.5 million barrels per day.
Global oil prices rose nearly 8 percent after the news, with Brent crude rising from $46 per barrel up to $50 per barrel.
Copyright RTT News/dpa-AFX