The story on OPEC's agreement to reduce production courtesy of theSKIMM

THE STORY courteous

Yesterday, OPEC agreed to cut oil production for the first time in years. BF gassy D.

BACK UP.

OPEC’s the fam of 14 countries (like Saudi Arabia, Iran, Venezuela) that together produce about a third of the world’s oil. In recent years, their profits have droppedthanks to things like fracking in the US. Lots of supply, meet not enough demand. Rich countries like Saudi Arabia have been able ride it out. Struggling countries like Venezuela and Nigeria, whose economies depend on higher oil profits, have not. OPEC has been saying ‘no thanks’ to cutting oil production for years. That’s partly because Saudi Arabia and Iran have wanted to wait it out rather than risk giving up market share to the US and Russia. But prices kept dropping, so now the waiting game’s over.

SO WHAT JUST HAPPENED?

OPEC says it’ll cut oil production by more than a million barrels a day starting next year. Russia heard the news and said ‘us too.’ Good news for countries like Venezuela, which might get a little breather from years of economic troubles. Bad news for your morning commute since gas prices could be on the up and up.

theSKIMM

Talk is cheap, competition between oil-producing countries is still fierce, and some OPEC countries are known for not keeping their promises. So TBD on whether this deal sticks…and whether it does anything to bring oil prices back up.

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