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Business

OPEC agrees to first production cut since 2008

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Opening sequence

Business

OPEC agrees to first production cut since 2008

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COMING UP:OPEC agrees to first production cut since 2008

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00:00:01
>> OPEC's woes over falling oil prices may be close to an end. After months of debate, the cartel of petroleum producing countries reaching a deal to cut production and drive prices back up. But Reuters energy correspondent, Amanda Cooper, says the details are unclear.>> When OPEC met in Algiers at the end of September they came forward.
00:00:20
And pledged that they would cut production in order to get rid of a surplus of unwanted crude oil that's persisted for about two years and weighed down prices. Between then and now we've seen divisions crop up between the group. Discrepancies over which country should be exempt. For example, Nigeria and Libya are expected to be exempt because they have suffered reductions to their production from civil unrest and violence.
00:00:41
Iran wanted exemptions, but it seemed that there was opposition from other members of the group, mainly Saudi Arabia. And now it seems that a lot of those differences have been smoothed over.>> OPEC countries account for a third of the world's oil. The Vienna meeting one of many held since prices started falling over a year ago.
00:00:59
Missing from the get-together, Russia and the United States. Neither are OPEC members but spikes in production from those countries have contributed to the lowered cost per barrel.>> Since of the middle of 2014 we really saw the boom in US shale oil production. Plus increasing production from OPEC itself and from other non-OPEC members such as Russia or Kazakhstan or even the North Sea.
00:01:21
The big question is what Russia will do. And Russia's producing oil at the highest rate since the end of the Soviet era. And while Vladimir Putin has expressed sort of support for the motion to cut and has said that it wouldn't be a problem for Moscow to freeze production or even join in a cut.
00:01:40
The question remains to whether that can be enforced and whether it will be enforced.>> A lot hangs on the deal. If it fails, that could mean another price plunge for the oil producers.