OPEC Gains Consensus for Cuts

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from The Wall Street Journal,

OPEC said its members agreed that they need to cut crude output to reduce the world’s supply glut, a shift for the 14-member group that was enough to send oil prices higher, even though reaching a deal remains far from certain.

Members of the Organization of the Petroleum Exporting Countries said they reached an understanding after a six-hour gathering in the Algerian capital, but deferred until November the fraught task of finalizing a plan to make those cuts. OPEC officials said a committee would be formed to determine how much each country would have to cut and then report to the group at its next meeting on Nov. 30 in Vienna.

Determining which countries will cut and by how much is a delicate negotiation that has undone previous efforts to curb output and boost prices.

Still, the group’s position after a session of informal talks that turned into an emergency meeting represents the first collective acknowledgment since oil prices cratered two years ago that the group will need to take action to alleviate a situation that has wreaked havoc on their economies.

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