OPEC agrees to cut production, oil prices rise

OPEC member country officials in Algiers said they had reached an agreement to limit production to between 32.5 million and 33 million barrels per day, cutting daily output by about 750,000 barrels, for the first time since 2008, with the group’s leader Saudi Arabia softening its stance on arch-rival Iran amid mounting pressure from low oil prices.

“We have decided to decrease production by around 700,000 bpd,” said Iran’s oil minister, Bijan Zanganeh.
Following the strategic agreement reached in Algiers, oil stocks moved higher in New York, bringing the rest of the market up with them. Oil prices  jumped more than 5% to trade above $48 per barrel after the outcome of OPEC’s informal meeting in Algeria took traders by surprise. 

“The energy sector has been the biggest drag on earnings for the past year and a half or two years, and if you can get some stability there, all of a sudden earnings start to look a lot better,” said Mark Kepner, managing director at Themis Trading in Chatham, NJ.