Oil soars 6 percent as OPEC reaches deal to limit output in November

Wed Sep 28, 2016 4:50pm EDT
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By Barani Krishnan

NEW YORK (Reuters) - Oil prices settled up nearly 6 percent on Wednesday after OPEC struck a deal to limit crude output at its policy meeting in November, its first agreement to cut production since 2008 and after the market crashed on oversupply.

The Organization of the Petroleum Exporting Countries reached agreement to limit its production to a range of 32.5-33.0 million barrels per day (bpd) in talks held on the sidelines of the Sept. 26-28 International Energy Forum in Algiers, group officials told Reuters.

OPEC estimates its current output at 33.24 million bpd.

"We have decided to decrease the production around 700,000 bpd," Iranian Oil Minister Bijan Zanganeh said.

OPEC will agree to production levels for each member country at its Nov. 30 meeting in Vienna, group officials said. After reaching its group target, it will seek support from non-member oil producers to further ease the global glut.

Brent crude LCOc1 settled up $2.72, or 5.9 percent, at $48.69 a barrel, hitting a more than two-week high of $48.96.

U.S. West Texas Intermediate (WTI) crude CLc1 rose by $2.38, or 5.3 percent, to settle at $47.05, after a peak $47.45, its highest since Sept 8.

The oil rally spilled over into the stock market, with Wall Street's index of energy shares .SPNY rising 4 percent for its best one-day gain since January. [.N]   Continued...

A pumpjack drills for oil in the Monterey Shale, California, April 29, 2013. REUTERS/Lucy Nicholson