In a first since 2008, the Organization of Petroleum Exporting Countries (OPEC) has reached a deal to cut oil production. In a meeting held in Vienna on Wednesday, the committe decided to cut oil production from 33.8 million barrels per day (bpd) to 32.5 million bpd.
In a press conference after the meeting, OPEC said it will reduce production by 1.2 million barrels per day from January 1, 2017.
Brent crude had spiked over 8 percent in anticipation of a cut today and was trading at USD 48.97 a barrel.
In its meet in September in Algeria, OPEC had suggested a deal to cut production.
Iraq will be reducing output by 200,000 bpd to 4.351 million bpd while non-OPEC member Russia will cut its output by 300,000 bpd.
OPEC will meet non-OPEC members in December again to discuss the situation.
The committee also said that Kuwait, Venezuela and Algeria will monitor compliance of the agreement.
The committee will meet again on May 25 to discuss and review the agreement. Depending on the situation that time, it could also extend it for another six months.
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