OPEC has agreed to cut 1.2 million barrels a day from its present output, the first cutback in eight years, after its 14 members put aside differences to agree on individual production levels.
The move, which will leave OPEC output at 32. 5 million barrels a day is to take effect in January.
It was announced by OPEC President Secretary General Mohammed Bin Saleh Al-Sada at the end of the meeting Wednesday. He also said major non-OPEC producers were ready to act in concert with OPEC and tentatively planning to reduce their output.
He did not list the countries involved beyond Russia saying Russia was prepared to cut 300,000 barrels from its output of more than 10 million barrels a day.
Dan McTeague from gasbuddy.com says this will have an effect on what we pay for gas in the GTA, and that kick in the shins is coming sooner rather than later.
"If everything holds true, you can expect to see a price hike of between 4 and 5 cents a litre on Friday." says the gas guru.
He says there is plenty of gas currently, but the speculators are driving up the prices, based on this news of the production cut.
But McTeague says there is another hike coming at the end of the year, when the new cap-and-trade program kicks in. On top of that, there are new regulations surrounding sulfur content in fuels, which go into effect in the new year. That too will likely lead to an increase in prices.