Saudis to cut oil output by 0.5 million bpd in OPEC deal

The move will not affect OPEC’s overall reduction as Indonesia’s share of cuts will be redistributed among other members. The index hit a high of 2,214.10.

BNN Commentator Andrew McCreath talks oil as OPEC meets in an attempt to finalize an output cut deal.

BONDS: Bond prices fell.

The materials group, which includes precious and base metals miners and fertilizer companies, lost 0.2 per cent.

And oil markets reflected the edginess – they inched up in trading ahead of the meeting, after dropping four per cent yesterday over concerns Iran and Iraq would hold out against conditions sought by Saudi Arabia’s representatives, according to Reuters.

Earlier this year, Trump made threats to halt oil imports from Saudi Arabia and other Arab countries if they didn’t commit to fighting ISIS or reimburse the US for their efforts. Steven Mnuchin, Trump’s proposed nominee for Treasury secretary, said the administration wants to make changes to the 2010 Dodd-Frank law because it makes it harder for banks to lend.

A separate report from the Commerce Department showed that personal income rose by more than expected in October, although the report also said personal spending increased less than anticipated.

Traders have now priced in an 89 percent chance of the Fed raising rates at its meeting next month, according to Thomson Reuters data.

The November 30 meeting in Vienna was being overshadowed by regional geopolitics, as Saudi Arabia and Iran jostled for economic, and regional, advantage.

Analysts, however, took a different view.

KEEPING SCORE: The Dow Jones industrial average added 59 points, or 0.3 percent, to 19,180 as of 3:25 p.m.

With Russia on board, that means global crude oil prices could rise as the imbalances between supply and demand are fixed. Brent crude, used to price global oils, rose $1.66 to $48.98 a barrel in London in volatile trading. Brent crude rose more than 4 percent to over $48 a barrel, after heavy losses a day earlier. “Kicking the can to the next OPEC meeting in half a year’s time”, he said.

This is the first time that the organization has agreed to cut oil output since 2008.

An Iraqi delegate on Wednesday said that some form of agreement would be reached, and Iran’s oil minister also said he was optimistic.

USA -listed oil companies including Exxon Mobil Corp, Chevron Corp and Schlumberger saw shares rise as crude prices climbed. The move effectively scraps its strategy of squeezing US competition through high supply that had backfired by lowering prices and draining the cartel’s own economies. Economists expect pending home sales to increase by 0.8 percent.

Following months of global oil market angst, the Organization of Oil Producing Countries (OPEC) has agreed to cut its crude production January 1 by more than 1 million barrels per day (MMbpd) to 32.5 MMbpd. The rate traded in NY was up $3.35, or 7.4 percent, to $48.65 a barrel. “We’re going to have to see these cuts truly get implemented”. He also said Russian Federation was ready to reduce production.

Iraq has agreed to cut its oil production by 209,000 barrels per day. OPEC agreed to the preliminary terms of a deal in September, which sent oil prices sharply higher.