Oil prices have shot up by 4 percent to their highest level since 2015 early after OPEC and other producers over the weekend reached their first deal since 2001 to jointly reduce output in order to rein in oversupply and prop up the market. Hayley Platt reports.
A deal at last, hopefully ending almost a year of squabbling between some of the world's biggest oil producing nations. Non-OPEC countries - including Russia, Iran and Azerbaijan agreeing on Saturday to cut production by 558,000 barrels a day. The news sent oil soaring to it highest level in almost 18 months. Brent crude hit $57 dollars a barrel before slipping back slightly. And U.S. crude topped $54 dollars a barrel. (SOUNDBITE) (English) OPEC PRESIDENT AND QATAR'S ENERGY MINISTER, MOHAMMED BIN SALEH AL-SADA, SAYING: "Our agreement has really stemmed from the sense of responsibility towards the balancing of the market which will lead to positive results." Last week OPEC agreed to slash its output by more than a million barrels a day. The deal was designed to end the worst oil downturn in a generation. Winning the backing of non-OPEC producing nations for the first time in more than a decade was seen as a victory for OPEC. It's hoping the price of oil will reach $60 per barrel when the cuts kick in the New Year. SOUNDBITE (English) IG SENIOR ANALYST, CHRIS BEAUCHAMP, SAYING: "You might actually have an environment where we're looking at an oil market that moves into deficit territory in terms of supply. But as ever with these OPEC and non-OPEC nations, the proof of the pudding is in the eating, so let's not get our party hats on too soon." OPEC has a long history of cheating on output quotas. And 15 years ago Russia broke its promise to cut at the same time as OPEC. This time there's hope the deal might stick as Saudi Arabia is shouldering the largest cuts. ////