OPEC agrees joint 1.2 mn bpd cut with partners

OPEC members and 10 other oil producing nations agreed Friday to cut output by 1.2 million barrels a day in a bid to boost prices.

Energy ministers reached the deal -- which takes effect from January 1 but has already sent prices surging on oil markets -- after two days of talks at OPEC headquarters in Vienna.

"We'll cut 1.2 million bpd total," Iraq's Oil Minister Thamer Abbas al-Ghadhban told reporters after a meeting in Vienna.

He said the amount -- equivalent to just over one percent of global production -- would comprise an 800,000 bpd reduction by the 14 members of OPEC and 400,000 by the 10 non-cartel partners, including Russia.

OPEC and its partners, which together account for around half of global output, agree that a glut in the market had led to oil prices falling by more than 30 per cent in two months.

Friday's deal does not however include Iran, which had demanded an exemption from any production cuts to take into account the effects of punishing US sanctions on its energy sector.

"Officially Iran is exempted from this resolution," UAE Oil Minister Bijan Namdar Zanganeh said.

The price of Brent crude, the European benchmark, surged five percent on Friday after reports of the deal emerged.

But some said the reduction may not be enough to keep oil prices buoyant.

"I would describe the cuts as close but not close enough with regards to eliminating the global oil glut," said Stephen Brennock, oil expert at London brokerage PVM.

"A combined reduction of 1.5 mbpd was needed to avoid a supply surplus in the first half of next year," he told AFP.

"Accordingly, the price outlook for the coming few months still remains skewed to the downside despite today's knee-jerk reaction."