OPEC Agrees to First Crude Production Cut in Two Years

OPEC agreed to cut oil production for the first time in almost two years to arrest a steep fall in oil prices. Oil ministers of the 13 OPEC nations made their decision at a meeting today at the group's Vienna headquarters. The following table lists the agreed production cuts announced today by OPEC's member states. The figures are in barrels a day.

The Organization of Petroleum Exporting Countries decided to lower supply by 1.5 million barrels a day from November, oil ministers said today at the end of a meeting at the group's Vienna's headquarters. The reduction will be from the existing quota for 11 members of 28.808 million barrels a day.

Production Cut

Algeria                       71,000 Angola                        99,000 Ecuador                       27,000 Iran                         199,000 Kuwait                       132,000 Libya                         89,000 Nigeria                      113,000 Qatar                         43,000 Saudi Arabia                 466,000 U.A.E.                       134,000 Venezuela                    129,000  TOTAL                      1,500,000

The last time OPEC decided to slash official quotas was at a December 2006 meeting in Abuja, Nigeria. The 500,000 barrel a day cut took effect in February 2007, expanding an earlier reduction agreed in October. The cuts were reversed later in 2007 as oil rallied.

Yet moments after the decision was announced, the price of Brent North Sea crude sank to 62 dollars per barrel for the first time since March 2007.

Crude futures in London and New York have plunged close to 60 per cent from record highs of above 147 dollars a barrel reached only three months ago when supply concerns sent prices soaring.

OPEC President Chakib Khelil told reporters that the cartel's output reduction would not impact inflation or economic growth.

"There's not going to be any impact on inflation. No impact on growth," he said following the cartel's decision.