Iraq agrees to cut down oil production

Iraq, along with Iran, had earlier been reluctant to go along with cuts, creating an obstacle for the Opec deal

Stating that the current prices are not sustainable for oil-producing countries, Iraq's Prime Minister Haider al-Abadi said his country would agree to cut  down its oil production as part of Opec's plan (Organization of the Petroleum Exporting Countries) to push crude prices higher.

Al-Abadi's comments could be critical because Iraq along with Iran has been reluctant to go along with cuts, creating an obstacle for an Opec deal, according to published reports.

Al-Abadi said he understands that Opec members will agree to reduce production by between 900,000 and 1.2 million barrels per day, marking a cut ranging between 2.7 per cent and 3.6 per cent from October levels. He said it would be enough to push prices up.

"Yes, we will take our share and we agreed to this," he told the Associated Press.

Benchmark international oil rose $1, or 2 per cent, on Monday to close at $48.24 a barrel. Al-Abadi said for every dollar oil prices rise, Iraq gains about $1 billion.

In late 2014, as crude prices tumbled from more than $100 a barrel, Opec countries decided not to intervene as they expected falling prices to drive high-cost producers in the United States out of business.

But a worldwide glut of oil has persisted and Opec has been pumping at record levels. Now the cartel is trying to regain some of its historical ability to affect prices.