08/10/2016 by Mark
Shares in oil giants Royal Dutch Shell, which produces Shell Tellus S2 M 32, and fellow oil big-hitter BP, have surged following an agreement between the biggest oil producing companies to cut production of oil for the first time since 2008.
By the end of Thursday, September 29, one day after The Organisation of the Petroleum Exporting Countries’ (OPEC) Extraordinary Meeting, Shell’s shares were up by nearly 7%, whereas BP shares had climbed 4.3%.
Other commodity companies had similar spikes in share prices following the announcement that a tentative deal had been reached.
Not only that, but OPEC’s deal on Wednesday proved a boost for oil prices, with the price for one barrel of Brent crude reaching above $49 (£37.78) for a short while, before falling again slightly.
Oil prices in June 2014 were as high as $115 (£88.67) per barrel, before falling to all-time lows of $30 (£23.13) at the beginning of this year, due to an oversupply of the black stuff, combined with falling demand.
However, OPEC had up until this point been unable to reach an agreement on a supply freeze.
The recent OPEC deal has renewed hopes that companies in the oil industry will be able to come back from the downturn and turn things around in the future, although there are many critics who say that the deal alone will not be enough to transform the fortunes of many of the countries and corporations hit hard by the rapid decline in oil prices, and its continuing struggle to climb back.
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