Opec springs a surprise by actually agreeing to cut oil output
SINGAPORE — Oil cartel Opec shocked markets with a deal to cut oil output after kingpin Saudi Arabia allowed bitter rival Iran to be exempted, but analysts warned on Thursday the move was unlikely to have a lasting effect. The cartel’s announcement of the first reduction in eight years sent crude prices surging up to 6% on Wednesday, while energy firms in the US and Asia followed suit with huge gains. At the end of six hours of negotiations and weeks of horse trading, Opec announced the plan to cut production to 32.5-million to 33-million barrels a day from the 33.47-million in August, the International Energy Agency said. READ THIS: Opec fails to agree on policy but Saudis pledge no shocks With strict implementation of the deal, it could add $7-$10 to oil prices in the first half of 2017, Goldman Sachs said. "Longer term, we remain sceptical on the implementation of the proposed quotas, if ratified," the analysts said. "If this proposed cut is strictly enforced and supports prices,...
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