MTECHTIPS:-Oil prices surge to 17-month highs on production cut deal

MTECHTIPS:-Oil prices surge to 17-month highs on production cut deal

MTECHTIPS-Oil prices surged on Monday, rising to the highest levels since July 2015 after major oil producers reached a deal over the weekend to cut output in an attempt to reduce the global supply overhang. U.S. crude was trading at $54.01 a barrel at 09:22 GMT, up $2.52 or 4.89% from its last close. Global benchmark Brent futures were at $56.90 a barrel, up $2.58 or 4.95%. The Organization of the Petroleum Exporting Countries and non-OPEC producers, including Russia, on Saturday reached their first deal since 2001 on coordinated production cuts to cut the worldwide glut in oil and drive prices higher. Producers from outside OPEC agreed to cut output by 558,000 barrels per day, short of the initial target of 600,000 bpd, but still the largest ever output cut by non-OPEC nations. Of that, Russia will cut 300,000 bpd. The agreement came after OPEC late last month announced plans to cut output by 1.2 million barrels per day from January 1, with top exporter Saudi Arabia cutting around 486,000 bpd. Oil prices received an additional boost after Saudi Arabia indicated Sunday that it may be prepared to make deeper cuts than it initially pledged. Saudi Arabia’s energy minister Khalid al-Falih said that Riyadh could cut output to below 10 million bpd. Oil prices have climbed above $50 a barrel since OPEC agreed on its first production cut since 2008, aimed at reining in massive oversupply that has pressured prices lower for the last two years.

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