October 24, 2008
OPEC decided to slash its oil output by 1.5 million barrels per day from November 1, at an emergency meeting here on Friday in a move which sent crude prices tumbling.
Analysts had expected the Organization of Petroleum Exporting Countries to cut its daily output by at least one million barrels per day as a global economic slowdown amid a worsening financial crisis slashes demand for energy .
OPEC ministers wanted to cut production in a bid to support plunging crude prices despite a looming worldwide recession.
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 percent 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.
British Prime Minister Gordon Brown had said ahead of OPEC 's meeting that any reduction made in a bid to push up oil prices would be "scandalous" at a time when major world powers, including Britain and the United States, are on the brink of recession.
However ahead of Friday's gathering, Iran -- OPEC 's second-biggest oil exporter -- and Libya both called for a reduction of two million barrels per day, while Venezuela said there should be a cut of at least one million barrels.
Global stock markets plunged on Friday, with London losing almost seven percent as it struck a five-year low on news that Britain's economy shrank in the third quarter, placing it perilously close to a recession.
OPEC comprises Algeria, Angola, Ecuador , Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela . A 13th, Indonesia, has suspended membership.
Indonesia officially leaves the cartel at the end of 2008, while Iraq does not have an output quota because of the country's post-war strife.