A hike in oil prices as OPEC member states agree on oil output cut deal

The oil producers cartel Opec has agreed a preliminary deal to cut production for the first time in eight years, sending crude prices surging.

The major oil exporting nations struck the deal at talks in Algeria on Wednesday to ease fears of oversupply.

“Opec made an exceptional decision today,” Iran’s Oil Minister Bijan Zanganeh said.

Brent crude, the international benchmark for oil, rose almost 6% to nearly $49 a barrel on the news.

While oil saw only small gains in early Asian trade, energy firms across the region soared.

Oil ministers said full details of the agreement would be finalised at a formal Opec meeting in November.

Output will fall by about 700,000 barrels a day, although the cuts will not be distributed evenly across the cartel, with Iran being allowed to increase production.

Disagreements between Iran and its regional rival Saudi Arabia had thwarted earlier attempts to reach a deal.