OPEC decides to cut oil output (Lead)

October 24th, 2008 - 8:37 pm ICT by IANS  

Vienna, Oct 24 (Xinhua) The Organisation of the Petroleum Exporting Countries (OPEC) Friday decided to cut oil output by 1.5 million barrels a day.OPEC made the decision at an urgent meeting here that was aimed at addressing the fall of oil prices over the past few months.

OPEC has decided to cut oil output by 1.5 million barrels a day from the current production of 28.808 million barrels a day, a resolution passed at the meeting said. The new regulation will be effective from Nov 1, 2008.

The group has also reached a consensus on the distribution of an overall output cut among the 13 OPEC members, it said.

Saudi Arabia, the biggest oil exporter in the world, will reduce its daily output by 466,000 barrels, the biggest cut among the OPEC members.

Iran, the United Arab Emirates, Kuwait, Venezuela and Nigeria also agreed to cut their daily production by over 100,000 barrels.

“There is over supply in the international market,” OPEC president Chekib Khelil, who is also energy minister of Algeria, told a press conference after the meeting.

Khelil said high oil prices “is not a demand issue”, noting that high oil prices were driven by speculations, “just like speculation has driven the price of dollar”.

OPEC, which produces around 40 percent of the world’s oil, also urged non-OPEC oil exporters to contribute to efforts to restore prices to “reasonable levels”, noting that “OPEC cannot be expected to bear alone the burden of restoring equilibrium” of oil supply and demand.

Khelil said OPEC had informed Russia, a major oil exporter outside OPEC, of its decision on output cut. “They will contribute,” he said.

Over the past three months, oil price has seen a steep fall in the international market, partly triggered by global financial crisis.

On July 11, 2008, oil price hit a record high of $147.27 per barrel, but it has plunged sharply thereafter.

Earlier Thursday, the price of New York oil dived to a new 16-month low in patchy trade. The light sweet crude for December delivery, sank as low as $65.90 per barrel.

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