30 November 2016 by lberuti
OPEC members were holding a meeting in Vienna today. They managed to confound skeptics and reached an agreement to cut oil supply, their first such move in eight years. Members of the organisation will reduce output by 1.2mln barrels per day and cap it to 32.5mln per day. With the prospect of less pumping – the agreement should come into force at the beginning of 2017 -, oil prices soared by 8%, and Brent was back above $50/barrel. After weeks of tense negotiations, the agreement, which also calls for a reduction of about 600,000 barrels a day by non-OPEC countries, was taken at face value by investors as Russia, the biggest producer outside the organisation, said it is ready to participate marking a reversal of its previous position. January is still far away and December will see ongoing record production, but that was brushed aside and the whole energy sector benefitted from the news, outperforming the rest of the market.