Oil Prices Surge 6% After OPEC Cuts Production For First Time Since 2008

The world’s leading oil nations – known as Opec – have struck a landmark deal at talks in Algeria that sees the countries agree to cut output and lift prices.

Oversupply has been dogging the world’s oil markets and hopes are that the first deal between the nations since 2008 will mark the end of the ‘dumping’ strategy previously favoured by the organisation’s members.

Immediately after the deal was agreed oil prices rose, with Brent Crude – the international benchmark – rising almost 6 per cent to nearly $49 a barrel last night.

Iran’s Oil Minister Bijan Zanganeh said: ‘Opec made an exceptional decision today. After two and a half years, OPEC reached consensus to manage the market.’

He added: ‘We have decided to decrease the production around 700,000 barrels per day.’

Oil ministers said full details of the agreement would be finalised at a formal Opec meeting in November when an invitation to join cuts could also be extended to non-OPEC countries.

Markets now have to wait and see whether non-OPEC producers such as Russia, the United States and Canada will make cuts of their own.

The agreement sees output 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.

The deal is even more remarkable given that disagreements between Iran and its regional rival Saudi Arabia had thwarted earlier attempts to reach any agreement.

Analysts said the deal shows Opec – whose members account for around 40 per cent of global supply – has finally woken up to the reality of oversupply and the damage its policies has caused the oil industry.

Cameroon Sees Surge In Bombings As Nigeria Chases Boko Haram

Nigeria’s campaign to quash the Islamist militant group Boko Haram has triggered a surge of bombings in neighboring Cameroon, where the army says it’s making headway in stopping attacks on military targets.

Cameroon’s Far North region has been hit by as many as 19 militant attacks since the beginning of the year, mostly bombings by teenagers with explosive devices strapped to their bodies. At least 74 people were killed, in addition to almost 1,100 civilians who died in extremist violence since 2013, according to government data.

“Increased military pressure in Nigeria has forced militants across the border,” Malte Liewerscheidt, senior Africa analyst at Bath, England-based risk consultancy Verisk Maplecroft, said in e-mailed comments. “Boko Haram operates rear bases in remote border areas, which are supported by networks based on ethnic kinship in Cameroon’s Far North region. These factors enable Boko Haram to operate with a degree of impunity.”

Following his election last year, Nigerian President Muhammadu Buhari ordered the army of Africa’s biggest economy to wipe out Boko Haram. The group has since lost territory in the northeast but continues to carry out bombings and hit-and-run attacks.

Cameroon, the world’s fifth-biggest cocoa producer, is situated on the oil-rich Gulf of Guinea and has sub-Saharan Africa’s fourth-largest proven gas reserves totaling 4.8 trillion cubic feet, according to the U.S. Energy Information Administration.

The Cameroonian government says it’s defeating the insurgents with the help of a joint military task force set up in August to combat a surge in cross-border attacks. The 8,700-member force will consist of soldiers from Cameroon, Nigeria, Chad, and Niger, countries which have all been targeted by the militants. France and China have pledged to donate weapons and vehicles.

The task force has a mandate to operate in several countries and “has been doing so with great success, as seen by the tactical changes Boko Haram has been obliged to make,” army spokesman Didier Badjeck said by phone from Yaounde, the capital. “They have been forced to adopt guerrilla tactics and suicide bombings.”

Credit: Bloomberg