Oil prices surge nearly 10% in New York after OPEC deal

Oil prices soared nearly 10 percent in New York on Wednesday after OPEC reached a deal to cut output for the first time since 2008, putting an end to months of suspense.

In New York, West Texas Intermediate light sweet crude for January delivery jumped $4.21, or 9.3 percent, to close at $49.44 a barrel.

Members of the Organization of the Petroleum Exporting Countries agreed to specifics of a deal to cut production by around 4.5 percent, or about 1.2 million barrels per day (bpd).

"It's a solid agreement," said Bob Yawger of Mizuho Securities. "That has the market in a very good mood."

A global supply glut and hopes of an OPEC deal saw oil prices rally and sink over the summer. Prices continued to fluctuate after OPEC members reached a preliminary agreement in September, when the details of the cuts seemed to be in doubt.

Yawger said the deal announced Wednesday had unexpected substance, imposing specific individual quotas. Russia -- a non-OPEC member -- agreed to reduce output by 300,000 bpd, while Iran receiving permission to increase production.

"To my surprise, it's a very good deal," he said.