OPEC today agreed a surprise cut in oil output limits from April, aiming to prevent a price slump as winter fuel demand wanes, an OPEC delegate said.
The decision cuts output limits for the group that controls half the world's oil trade to 23.5 million barrels a day from April 1st.
The deal is designed to help prop up oil prices when demand slackens after the northern hemisphere winter, without sending prices spiralling too high by cutting immediately.
The delegate said the agreement was to implement the reduction from the start of April, even though OPEC is already scheduled to meet again on March 31st.
An OPEC official said the group had also agreed to immediately eliminate 1.5 million barrels a day of quota-busting now being pumped above existing supply quotas.
The Organisation of the Petroleum Exporting Countries has been flouting self-imposed production limits to contain a winter price spike.
Oil prices rose sharply on the deal. US crude at 2.20 p.m. was up 52 cents at $33.35, valuing OPEC reference basket above the group's preferred $22-$28 target range.