Oil Prices Surge as OPEC and Allies Cut Deal on Production Cut

Following two days of grueling negotiations, OPEC members and its close allies have finally reached a deal to cut oil production, going against President Donald Trump and helping to boost market sentiment.

Following the news of the deal, crude oil futures surged more than 5%, putting an end to oil's continuous losing streak. WTI gained +4.9% to $54.03/bbl, while Brent crude gained +5.2% to $63.19/bbl.

The alliance has confirmed to remove 1.2 million barrels per day from the market, in-line with expectations of 1 million to 1.4 million bpd. According to the deal, the 15-member OPEC cartel has agreed to reduce its output by 800,000 bpd, while Russia and the allied producers will contribute a 400,000 bpd reduction. Russia single-handedly agreed to a production cut of 200,000 barrels per day.

OPEC clinched the deal with allied oil-producing nations including Russia at its headquarters in Vienna, Austria on Friday.