The price of oil has surged by over 5% after members of OPEC agreed a deal to cut output for the first time in eight years.

The oil producers' cartel led by Saudi Arabia has refused to lower production which has caused oil prices to crash. Oil prices reached $100 a barrel in mid-2014, but an oversupply caused prices to drop to $26 a barrel in February 2016.

But under the new agreement, to be finalised in November, OPEC oil production will be reduced from 33.4m barrels a day to between 32.5m and 33m, CNN reported with Saudi Arabia expected to give up 350,000 barrels a day.

Brent crude, the international benchmark for oil, rose almost 6% to nearly $49 a barrel on the news.

"Opec made an exceptional decision today," Iran's Oil Minister Bijan Zanganeh said after talks in Algiers, according to the BBC.

He said a committee would determine how much each country would have to cut and then report to the group at its next meeting on 30 November in Vienna.

Meanwhile, it has been reported that Iran, Nigeria and Libya will be exempt from the agreed cuts.

Regarding the oversupply of oil, OPEC Conference President Mohammed Bin Saleh al-Sada, told the group before its private gathering. "It is evident that there is now a greater degree of urgency," the Wall Street Journal reported.