Opec reaches deal to LIMIT oil output: Sources

How will this affect the world? Here are some key points...

A cut to 32.5 million barrels would represent a cut of nearly 1 million barrels a day. OPEC production in August was 33.24 million barrels a day, it said in its monthly oil market report.
* The producing group will agree to concrete levels of production by each country at its next formal meeting in November, the sources said. One source also said that once production targets were reached, OPEC would reach out to non-OPEC producers for cooperation.
* Saudi Energy Minister Khalid al-Falih said on Tuesday Iran, Nigeria and Libya would be allowed to produce "at maximum levels that make sense" as part of any output limits which could be set as early as the next OPEC meeting in November.
* The Saudi and Iranian economies depend heavily on oil but in a post-sanctions environment, Iran is suffering less pressure from the halving in crude prices since 2014 and its economy could expand by almost 4 percent this year, according to the International Monetary Fund. The Saudi economy has been suffering from record budget deficits after a record gap of $98 billion last year.
COMMENTS: SARP OZKAN, SENIOR ENERGY MARKET ANALYST WITH PONDEROSA ADVISORS IN DENVER, COLORADO:
"It's definitely a shock that it's a lower output level that they've agreed to. We'll see in November to see how they're going to divvy these numbers around. It's going to be hard with some of the producers below levels they want to be at currently. For prices this is pretty bullish, so this is definitely going to help U.S. producers. We could see a ramp up in activity and even a rise in exports to fill void in lower production volumes from OPEC.
"Right now we are oversupplied by pretty much about what they're deciding to cut by, so I believe that cut size makes sense.
"There are countries like Iran, Nigeria and Libya who are below where they'd like to be in terms of production."
MICHAEL WITTNER, GLOBAL HEAD OF OIL RESEARCH AT SOCIETE GENERALE IN NEW YORK:
"This could potentially be very significant, not for the barrels that could be removed from the market, but because it's a signal that the Saudis could be returning to active supply management. That's the bottom line.
"It remains to be seen how many real barrels will be removed from the market. To me, the significance is way beyond that: they all sat down in a room and made a decision."
CARL LARRY DIRECTOR, DIRECTOR OF BUSINESS DEVELOPMENT FOR OIL & GAS AT FROST & SULLIVAN:
"There was a lot leading up to this outcome: Saudi injecting $20 billion riyal into system, Saudis cutting public pay... even the consistently low imports into the U.S. for the last few weeks. The time was long overdue and we may have even passed it. Now it's a matter of how much higher is enough.
"If we're trading around $50 in November, the question is if OPEC needs more at that point. It could be enough to spur another cut and target even lower production.
"I think for the oil price, we're headed to $50 and then see what we can get by November. Many countries are still going to struggle with prices well below their break-even." DAVID THOMPSON, EXECUTIVE VICE-PRESIDENT AT COMMODITIES-FOCUSED BROKER POWERHOUSE IN CHICAGO:
"So, they came to an agreement and they promise they will tell us in six weeks? If there is a deal, there is a deal: Show it to me. Let me see the Saudi and Iranian and Russian oil ministers standing next to one another."
PHIL FLYNN, SENIOR ENERGY ANALYST AT PRICE FUTURES GROUP IN CHICAGO:
"This is a historic deal. This is the first time OPEC and non-OPEC will agree together in over a decade. This should put a floor on oil and should see oil move back toward the $60s. First OPEC deal in eight years! The cartel proved that it still matters even in the age of shale! This is the end of the 'production war' - OPEC claims victory."
TOM DONINO, CO-HEAD OF TRADING AT FNY CAPITAL MANAGEMENT, NEW YORK:
"The market is a little surprised by it. Going into today the majority of people thought there was not going to be a deal. It doesn't seem to be that big of a cut but it certainly has energy stocks and the energy futures market rallying."
PAUL ZEMSKY, CHIEF INVESTMENT OFFICER, MULTI-ASSET STRATEGIES AND SOLUTIONS AT VOYA INVESTMENT MANAGEMENT IN NEW YORK:
"If they agree on an output cap oil prices go higher and that is good for U.S. earnings as we've seen the impact of lower oil on those."
He said if higher oil prices lead to more production in the U.S. that is overall positive for the economy and has a multiplier effect beyond the energy sector to industrials, services and even tech, and "could add one-quarter to one-third point to GDP growth."
"Higher oil is a positive for the U.S. if it remains a modest rise, between $50 and $60 per barrel. If it remains reasonable, a rise in oil prices would mostly not hurt the consumer."
MICHAEL TRAN, DIRECTOR OF ENERGY STRATEGY AT RBC CAPITAL MARKETS IN NEW YORK:
"While a segment of the market will chalk the agreement up to typical OPEC jaw-boning, the headline provides near-term support while follow through and execution remains paramount. The reinstalling of a system of checks and balances is a constructive outcome given that lack of output accountability is what has plagued OPEC over recent years." JEFF QUIGLEY, DIRECTOR OF ENERGY MARKETS AT STRATAS ADVISORS IN HOUSTON:
"The devil's in the details here. There's no final announcement yet. And for them to say it's going to start in November is very suspect to me. This stuff happens all the time, backroom deals. This sounds preliminary to me.
"We don't know yet who's going to produce what. I want to hear from the mouth of the Iranian oil minister that he's not going to go back to pre-sanction levels. For the Saudis, it just goes against the conventional wisdom of what they've been saying and what they've been saying."
MICHAEL D. COHEN, HEAD OF ENERGY COMMODITIES RESEARCH AT BARCLAYS IN NEW YORK:
"That would be more than half a million barrels a day lower than what they were at in August. It appears this informal output cut proposal that was reported earlier of 697,000 bpd is their aspiration at this point. I'm going to reserve comment until I see any final statement. Our view is that it is likely that what is going to happen is nothing more than the status quo, in which the Saudis usually reduce their output post-summertime. And this is a good way to put a good face on what is likely happening already. If that helps to preclude a market participant from putting a short on then they've done their job and they can wait to follow through on their words until a time like November when the market rebalancing will be closer at hand."