OPEC agrees to cut 1.2 million barrels a day, pleasing U.S. oil companies. - Grist

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REUTERS/Sergei Karpukhin

OPEC agrees to cut 1.2 million barrels a day, pleasing U.S. oil companies.

For the first time in eight years, OPEC — you know, that cartel of 14 oil-rich countries like Saudi Arabia, Iran, and Venezuela — made a deal to curb production starting in January.

It’s partially a response to the worldwide glut of oil that has battered crude prices over recent years. OPEC’s profits from oil exports have plunged from a record $920 billion in 2012 to $341 billion this year. This puts countries that depend on oil exports (looking at you, Venezuela) between a shale rock and a hard place.

To push prices back up, OPEC members agreed to slash production, leading to an 8 percent spike in crude prices on Wednesday. Investors raced to buy shares of U.S. shale oil companies. Continental Resources  — founded by Harold Hamm, Trump’s energy advisor — jumped 25 percent after the announcement. Whiting Petroleum soared 32 percent, its biggest one-day jump in 13 years.

This celebration is sure to lead to a hangover. For one, OPEC countries have a hard time sticking to their agreements. And experts predict a long century of decline for oil as demand peaks in the next decade. Of course, those estimates assume countries will keep their pledges to combat climate change.