Economy

Opec cuts daily production

Article published on the 2008-09-10 Latest update 2008-09-10 09:55 TU

(Photo: Reuters)

Opec on Wednesday announced a cut in its production to bring it to 520,000 barrels per day (bpd) in a reaction to the fall of oil prices below 100 dollars per barrel.

Opec president Chakib Khelil made the announcement after a long meeting on Tuesday evening. He said be believed prices would continue to drop, despite Opec's move, after they hit 99.04 dollars (70.1 euros) earlier on Tuesday.

Iran and Venezuela supported the reduction as a means to increasing prices although Saudi Arabia moved earlier this summer to increase production so as respond to fears in the west of high oil prices.

The International Energy Agency said on Wednesday that it was cutting its estimate for global oil demand. Its monthly report concluded that demand in the United States had fallen and that Opec's supply was already down in August by almost 200,000 bpd.

Russia on Tuesday appealed to Opec for closer co-operation. Russia's Deputy Prime Minister Igor Sechin said it was one his country's priorities. Russia is the second-largest oil producer in the world and Opec delivers 40 per cent of global oil.

Opec also announced that Indonesia had left the group. This follows Jakarta's announcement last May that it had become a net importer of oil rather than exporter.

Indonesia's Energy Minister Purnomo Yusgiantoro said the country would rejoin Opec if its production increased. He added that production had been falling in the country since 1995.