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OPEC announces historic cuts to buoy oil prices

The petroleum cartel said it will slash production by 2.2 million barrels per day in hopes prices will climb back toward $75 per barrel.

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OPEC Powerhouse: Saudi Oil Minister Ali al-Naimi attended the 151st Extraordinary Meeting of OPEC. The oil cartel said it will slash production by 2.2 million barrels per day.

Zohra Bensemra/Reuters

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In a bid to confront rapidly sliding oil prices, which have dropped 40 percent from July highs amid collapsing demand, OPEC members announced historic cuts at their meeting in Algeria on Wednesday.

Oil ministers attending the Organization of Petroleum Exporting Countries meeting will slash production by 2.2 million barrels per day (b.p.d), the largest single reduction in the group's history and more than expected ahead of the gathering. It follows a November production cut of 1.5 million b.p.d.

Oil prices have plunged since July, when crude traded at $147 a barrel. By midafternoon Wednesday, it was trading at $43.24 on the New York Mercantile Exchange.

"Supply is still somewhat in excess of demand," Saudi Oil Minister Ali al-Naimi told reporters in Oran, Algeria, according to the Associated Press. "To bring things in balance, there will be a cut to the tune of about 2 million barrels."

Saudi Arabia is the most influential member of the bloc, which includes other heavy-hitters like Kuwait, Qatar, Iran, Nigeria, and Venezuela.

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