December 02, 2016Print : Business
Oil prices shot up 13 percent, smashing trading volume records, after OPEC and Russia cut a deal to reduce output to drain a global supply glut, but analysts warned they could remain modest by historical comparison as other producers fill the gap.
The Organization of the Petroleum Exporting Countries (OPEC)agreed on Wednesday its first oil output reduction since 2008 after de-facto leader Saudi Arabia accepted "a big hit" and dropped a demand that arch-rival Iran also slash output.
The deal also included the group´s first coordinated action with non-OPEC member Russia in 15 years.
"OPEC has agreed to an historic production cut," analysts at AB Bernstein said.
"The cut of 1.2 million barrels per day (bpd) was at the upper end of expectations (0.7-1.2 million bpd).
An additional cut of 0.6 million bpd from non-OPEC countries could significantly add to what has been announced by OPEC.