Markets and oil price boosted by OPEC deal to cut production

Markets have turned higher after top oil producing countries agreed a deal to cut production for the first time in eight years.

The decision helped the price of a barrel of Brent crude climb above $49 overnight and boosted energy-related shares trading in Asia.

Oil prices were as high as $115 in June 2014 before slumping to less than $30 earlier this year thanks to weakening demand and oversupply.

But until now the Organisation of Petroleum Exporting Countries - dominated by Saudi Arabia - had failed to reach an agreement to turn off the taps.

Japan's Nikkei was up by 1.6% while Hong Kong's Hang Seng rose about 0.5% but saw gains fade amid caution about the agreement.

The OPEC deal boosts hopes for companies in the oil sector, which has been severely hurt by the downturn.

A report into the North Sea oil and gas industry this week estimated 120,000 people had lost their jobs over the past two years.

However, lower oil prices have helped other parts of the economy, with cheap fuel helping consumer spending power and keeping a lid on inflation.

The deal reached by OPEC countries on Wednesday saw Saudi Arabia soften its stance on smaller producers such as Iran, allowing them to keep pumping oil "at maximum levels that make sense".

Saudi Arabia had previously insisted it would only reduce its output if every other oil producing country did the same.

OPEC had been keeping production high to try to counter the growing threat from shale oil production by the US, which is not an OPEC member.

Iranian oil minister Bijan Zanganeh said the deal, following talks in Algiers, was an "exceptional decision".

OPEC ministers said they would reduce output to 32.5-33 million barrels per day, down from its current estimated level of 33.24 million.

However, details of how much each country will produce will not be worked out until the next formal OPEC meeting in Vienna in November.

It is not the first time OPEC has tried to bolster prices.

In April, Saudi Arabia said it would cut production if Iran did the same.

But Iran, readmitted to world oil markets this year after being freed of economic sanctions, aggressively increased output to bolster its own public finances.

Earlier this week, amid the pressure on its own coffers, Saudi Arabia announced massive cuts to its public sector wage bill and cancelled bonuses for employees of state enterprises.

The world's biggest oil exporter's budget deficit is expected to exceed 13% of total economic output this year.