The price of oil has surged after reports that OPEC members have agreed some details of a production cut.

Prices rose nearly 7% as energy ministers attended Wednesday’s OPEC meeting in Vienna.

Ahead of the meeting Saudi energy minister Khalid Al-Falih had said “there are good chances” a formal deal could be struck.

In September oil ministers had said full details of the agreement would be finalised at the meeting.

OPEC pledged to limit production by about 700,000 barrels a day, but said Iran would be allowed to increase production.

Oil prices rose then, but the absence of detail prompted some traders to have second thoughts about whether the cartel would actually take firm action.

Saudi Arabia has agreed to cut output by about 500,000 barrels per day at the meeting, the Reuters news agency reported.

That would take its output to 10.06 million barrels per day.

The news agency also reported that OPEC has agreed to suspend Indonesia's membership to allow Iran to set new production levels at 3.797 million barrels per day.

Ahead of Wednesday’s meeting, Mr Al-Falih said “there are good chances” that a detailed deal can be brokered, and that “the spirit is good”.

He said Saudi Arabia would have to “take a big cut and a big hit” to current production – and its 2017 forecast – if OPEC production were limited to 32.5 million barrels per day.

“So we will not do it unless we make sure that there is consensus,” he added.

A production freeze for Iran at pre-sanctions levels would be “very considerate of other OPEC members when they’re having to cut,” he said.

“Iran has recovered to its pre-sanctions levels,” Mr Al-Falih said.

Saudi Arabia has also been discussing a production cut with Russia, he added.

Brent crude rose 6.9% to $50.58 per barrel, while US crude also rose 6.7% to $48.25.

“The extent of the (price) move shows no one wants to miss the boat. There must be a general consensus that there will be a cut, whether it’s going to be bullish, I don’t know, but it’s the domino effect,” said PVM Oil Associates analyst Tamas Varga.

Traders said markets were jittery and prices could swing sharply in either direction depending on developments in Vienna.

A decision to cut has been hindered by a rivalry between Saudi Arabia, OPEC’s top producer, and Iran.

The Saudis have been hesitant to shoulder the lion's share of a cut, while Iran has resisted reducing its own production, arguing it has yet to recover its output levels after years of sanctions. (BBC)

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