The powerful Opec group of oil producers and its allies reached a deal Friday to cut production by 500,000 barrels per day in a bid to stem prices which have been under pressure from abundant reserves and weak global economic growth.
Friday’s so-called Opec+ meeting included Russia, the world’s second-largest oil producer and not a member of the cartel.
It ended with a deal for a cut effective as of January 1 which sets an output target 1.7 million barrels per day lower than October 2018 levels, with Saudi Arabia and Russia making almost half the additional reductions between them.
In a surprise move, the bloc also announced that several participating countries, “mainly Saudi Arabia”, would make additional voluntary cuts bringing the overall cut to more than 2.1 million barrels per day.
World oil prices surged in response, with US benchmark WTI and its European counterpart Brent both rising two percent in an initial reaction before settling down at levels around 1.3 percent higher on the day in the late European afternoon. On Thursday, a meeting of Opec ministers had run late into the evening without a deal.
Saudi Oil Minister Prince Abdelaziz Ben Salman, who was at his first meeting in the post, said first-day talks lasting six hours saw delegations “labouring... until 11 o’clock in the evening, squashing their heads, squeezing their brains” in search of an agreement.