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OPEC to cut output by 520,000 bpd

(Agencies)
Updated: 2008-09-10 10:19

VIENNA, Austria -- The OPEC oil group has agreed to cut its real output by 520,000 barrels per day in the next 40 days, OPEC's President and Algerian Energy Minister Chakib Khelil said Wednesday.

Minister of Energy from the United Arab Emirates Mohamed bin Dhaen Al Hamli gestures as he speaks to journalists prior to the start of the OPEC meeting at their headquarters in Vienna, Austria, Tuesday Sept. 9, 2008. [Agencies]

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When asked about the size of a proposed cut to OPEC's current production, Khelil replied: "I think if you do your own calculations, it is a cut of 520,000 barrels per day."

"Actions (to cut output) will be taken by members as soon as they can, that means in the next 40 days," he added.

World oil prices have rebounded in Asian trade following the announcement of the planned cuts by the oil group.

New York's main contract, light sweet crude for October delivery rose by 91 cents to 104.17 dollars a barrel while Brent North Sea crude rose 46 cents to 100.80.

An OPEC spokesman said that OPEC members had agreed to "strictly" comply with a quota target of 28.8 million barrels per day excluding Indonesia and Iraq.

"Since the market is oversupplied the conference agreed to abide by September 2007 production allocations totalling 28.8 million barrels per day, levels with which member countries committed to strictly comply," said the spokesman, reading a statement from the organisation.

The 13 members of the Organisation of Petroleum Exporting Countries held late-night talks Tuesday to Wednesday before coming to their decision, which is likely to boost sagging crude prices.

Oil sank below 100 dollars for the first time in five months in London Tuesday when Brent North Sea crude for delivery in October dropped to 99.04 dollars in late trade.

The OPEC statement identified a shift in sentiment in the oil market linked to falling economic growth, a strengthening dollar, easing geopolitical tensions and greater supply.

"All the foregoing indicates a shift in market sentiment causing downside risks to the global oil market outlook," it said.