OPEC agrees on output cut deal with non-members

OPEC and non-OPEC members agreed on Saturday to curb oil output in order to ease the global supply glut, marking the first such deal since 2001.

Producers from outside the 13-nation cartel pledged to cut production by 558,000 barrels per day (bpd), starting Jan. 1, 2017 for an initial period of six months, OPEC said in a statement.

The agreement is extendable for another six months taking into account market conditions and prospects.

The oil-producing countries that agreed to the deal were Azerbaijan, Bahrain, Bolivia, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan and South Sudan.

Two of these nations will join a three-member OPEC ministerial committee chaired by Kuwait, with Russia acting as alternate chair, the statement said.

Of the 558,000 bpd target, Russia is expected to cut 300,000 bpd, the country’s energy minister Alexander Novak said, cited by Reuters.

Members of OPEC reached an agreement on Nov. 30 to slash crude production by 1.2 million barrels per day (mbd) to help rebalance the market and shore up oil prices, which have more than halved since late-2014.

The deal will set a ceiling of 32.5 mbd for the producer group, with top exporter Saudi Arabia cutting as much as 486,000 bpd.

The decision to curb production is the first significant intervention to support price since 2008.

Oil prices surged over 15 percent following the Nov. 30 meeting, crossing the $50 mark. Brent crude last closed 0.8 percent higher on Friday at $54.33 per barrel (bbl), while WTI was up 1.3 percent at $51.5/bbl.