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Oil Prices Plummet On Fear OPEC-Russia Output Cuts Will Unravel in 2017

Iraqi workers stand near a pipeline as it ejects oil at Al Tuba oil field in southern Iraq

World oil prices have plummeted over concerns that a deal to curb production reached between OPEC, Russia, and other producers will not hold for much longer.

The drop of nearly 4 percent in London premium crude prices to $54.82 a barrel came after Iraq reported that exports from its largest oil fields in the south hit a record of 3.5 million barrels a day last month.

Iraqi Oil Minister Jabbar al-Luaibi said the surge in production "will not affect Iraq's decision to cut output from the beginning of 2017. Iraq is committed to achieving producers' joint goals to control the oil glut in world markets."

However, investors worried that soaring production in Iraq, OPEC's second-largest producer, will be accompanied by increasing production in Iran -- which was exempted from the production agreement between OPEC and Russia -- as well as increasing production in the United States, which was not part of the OPEC deal.

Iraq and other OPEC producers on November 30 pledged to cut their production by 1.2 million barrels a day this year, while Russia, Kazakhstan, Azerbaijan, and eight other non-OPEC producers agreed to further cuts of 558,000 barrels a day.

Based on reporting by AP, Reuters, and Bloomberg