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Oil price rises

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Oil prices are at their highest levels this year.

Brent crude futures are trading at more than $66 a barrel, up 0.6%, while West Texas Intermediate is 0.9% higher at just over $56 a barrel.

Supply cuts by Opec are among the reasons being cited as fuelling the rise.

Oil prices dip

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Oil prices have fallen after disappointing US factory data sparked fresh concerns about a slowdown in the global economy.

Brent crude futures dropped 0.2% to $62.6 a barrel, and US West Texas Intermediate fell 1.4% to $54.48 a barrel.

Weighing on oil markets, US government data showed new orders for US-made goods unexpectedly fell in November, with sharp declines in demand for machinery and electrical equipment.

Oil prices had been buoyed by a new round of supply cuts from Opec and its allies.

Oil prices climb after Opec production cut

Oil price chart

The oil price has risen almost 2% this morning to $58.13 a barrel.

That marks an increase of more than 8% since the beginning of the year, as the market absorbs cuts in Opec production that come into force this month.

OPEC deal will support US drilling

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There has been mainly favourable reaction to an oil production cut agreed by OPEC and its allies, including Russia.

So far there has been no word (or tweets) from US President Donald Trump who has been calling for Saudi Arabia, the largest member of OPEC, to keep a lid on oil prices.

However, Ann-Louise Hittle, vice president of macro oils at Wood Mackenzie, says: "The decision is likely to be met with support from some US producers who were concerned that without a deal, West Texas Intermediate prices would fall further, possibly curtailing 2019 drilling activity."

She adds that the 1.2 million barrels per day cut in daily oil output would cause Brent crude to rise back above $70.

OPEC deal boosts oil stocks

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The FTSE 100 ended the week on the up, closing 1.28% ahead at 6,789.74.

John Wood Group, the oil services business, finished the day at the top of the blue chip risers, with its share price up 4.42% at 628p.

A production cut by OPEC and its allies sent oil companies to the top of both indexes.

On the FTSE 250, Premier Oil's share price rose 14.75% to 75.85, followed by Tullow Oil, up 7.4% at 189.6p and Cairn Energy, ahead 4.8% at 167.7p.

An earlier statement by Primark that it had experienced a "challenging November" meant that its parent company, Associated British Foods, was the biggest faller on the FTSE 100.

Its share price fell 4.6% at £22.42.

The FTSE 250 ended 0.51% higher at 0.51% at 17,844.11.

Oil production cut to fix 'growing imbalance'

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Following a meeting at OPEC's headquarters in Vienna, the group says that “in view of the current fundamentals and the consensus view of a growing imbalance in 2019" it will reduce output by 800,000 barrels per day (bpd) from January.

The reduction will be for an initial period of six months, which will include a review in April.

Russia and other non-OPEC nations will also cut 400,000 bpd

OPEC members Iran, Venezuela and Libya are exempt from the cut.

Saudi Arabia, which is the largest member of OPEC, said it will reduce output to 10.2 million bpd in December from 10.7 million bpd in December.

Oil edges lower as Opec meets

Suhail Mohammed Al Mazrouei, the United Arab Emirates" energy minister and President of the Opec conference

Oil traders will be keeping an eye on events in Vienna today, where members of the oil producers club, Opec, are in the second and final day of talks.

On Thursday it seemed that the oil cartel had agreed to cut production, but reports today say that Iran is looking for an exemption from any production cuts.

Also Russia, which is not in Opec, has yet to commit to any cut in production, which would help drive up prices.

There might be more clarity this afternoon when Opec meeting non-Opec oil producers.

North Sea Brent Crude is trading 15 cents a barrel lower at $59.91 a barrel.