Oil prices surge as OPEC reaches agreement to cut oil production

OPEC new output ceiling at 32.5-M bpd

Futures for February settlement rose 1.2 percent to $52.48 a barrel on the London-based ICE Futures Europe exchange at 3:47 p.m. Singapore time.

Brent, the benchmark for more than half of the world's oil, surged by the most since February on Wednesday after the OPEC agreement in Vienna.

OPEC is to establish a ministerial committee to monitor the implementation of the agreement to secure the oil reduction. "The group demonstrated more cohesiveness than at any point" since cutting in 2008, he said.

By the morning December 1, the price for Brent crude futures LCOc1, the Global benchmark for oil prices, jumped 13 percent from below $50 on November to $52.54 per barrel. US crude ended at $49.44, up $4.21 or 9.3%.

The energy index soared as much as 7.4 per cent, recording its biggest intra-day percentage gain in eight years.

Brent crude was trading at above $53 per barrel, while US West Texas Intermediate was approaching $51 per barrel.

Production in the USA has grown by more than three percent this year, reaching a daily output of 8.7 million barrels.

An Opec-non-Opec deal was made possible by a deal within the Opec with Saudi Arabia accepting "a big hit" on its production and dropping its demand that Iran slash output, while Iraq agreed to rein in booming production to help prices.

Analysts are also doubtful over how the agreement will be enforced, as OPEC has no authority to make its members comply. Russia, the largest non-Opec producer, has also agreed to reduce its output gradually.

Analysts are now focusing their attention on implementation of the deal, the first agreement since 2001 by the Organization of the Petroleum Exporting Countries (OPEC) and Russian Federation to coordinate production cuts.

The price then recovered, steadily increasing to around 100 United States dollars a barrel before a dramatic crash in 2014. Floridians last month paid an average of $2.15 at the pump and the saw the second-lowest average since 2004, just 2 cents higher than 2015, says AAA. If the group sticks to its commitments, oil may trade from $50 to $60, Morgan Stanley said.

Rajiv Biswas, Asia-Pacific chief economist for IHS Global Insight, said in an emailed note that while the move will be negative for oil importing countries - including Japan, China, South Korea, Thailand, the Philippines and India - the overall negative impact is expected to be relatively modest.

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