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High-Stakes OPEC Meeting Today Pays Off

opec meeting todayAt the OPEC meeting today, member countries agreed to cut oil production for the first time since 2008, and that's a huge deal for oil prices.

WTI crude oil prices are up nearly 7% so far this morning, trading at $48.68 a barrel.

The announcement from OPEC isn't official yet, but reports from delegates at the meeting confirm the substantial agreement has been reached. The OPEC agreement will reduce OPEC oil production to 32.5 million barrels a day. That's the number OPEC had originally discussed in September.

Russia, the world's second-largest oil producing country, was originally planning to attend the Vienna OPEC meeting but pulled out. Russia is not an OPEC member, but after the Sept. 28 announcement had said it would participate in a production cut. Since then, Russia has said it would merely freeze its output and only if OPEC came to an agreement first. With an OPEC deal in place, Russia now has the ability to strengthen it.

While crude oil prices are soaring today, the deal affects more than just oil prices.

As Dr. Kent Moors, Money Morning's Global Energy Strategist, said ahead of the November OPEC meeting, "the future of OPEC" is at stake today.

If OPEC failed to finalize an agreement after its surprise September announcement, the organization would have lost its clout as an effective manager of oil prices.

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OPEC hadn't agreed to an oil production cut since 2008. Crude oil prices hit 10-year lows at the beginning of the year, falling below $35 a barrel. But the cartel couldn't stop the fall of oil prices as infighting within the organization limited attempts to control the oil supply. A failure to get to a deal at this meeting would have been a substantial blow to the organization.

Now that OPEC has reaffirmed its viability, we have a much clearer picture of where oil prices are headed in 2017…

How the OPEC Meeting Today Affects Oil Prices

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