OPEC Agrees to Cut Production Quotas as Price Slumps
source: http://www.bloomberg.com/apps/news?pid=20601087&sid=acsLON7GvW.8&refer=home
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The Organization of Petroleum Exporting Countries cut oil production targets for the first time in almost two years as the group battles to slow a collapse in prices.
OPEC 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 28.8 million barrels a day.
``Demand is significantly less than what is being supplied, that is the reason the cut was taken,'' Saudi Arabian Oil Minister Ali al-Naimi said after the meeting. Crude oil has tumbled 57 percent from a July 11 record of $147.27 a barrel as the financial market crisis spreads, job cuts increase and fuel consumption slows. Prices fell as much as 7.7 percent today.
``OPEC has offered the market all the ammunition they had,'' said Robert Laughlin, senior broker at MF Global Ltd. in London. ``With the bearish economic outlook and manufacturing in freefall this accord is not good enough.''
OPEC President and Algerian Oil Minister Chakib Khelil said at a news conference that the cut will be ``100 percent effective'' in stabilizing prices.
U.K. Prime Minister Gordon Brown is ``disappointed,'' his spokesman told reporters in London. ``We're concerned by the decision. OPEC has a crucial part to play in the stability and recovery of the world economy.''
[End of excerpt]
Full story at link by Maher Chmaytelli and Margot Habiby// Bloomberg.com: Worldwide
Photo by Vladimir Weiss// Bloomberg News
OPEC 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 28.8 million barrels a day.
``Demand is significantly less than what is being supplied, that is the reason the cut was taken,'' Saudi Arabian Oil Minister Ali al-Naimi said after the meeting. Crude oil has tumbled 57 percent from a July 11 record of $147.27 a barrel as the financial market crisis spreads, job cuts increase and fuel consumption slows. Prices fell as much as 7.7 percent today.
``OPEC has offered the market all the ammunition they had,'' said Robert Laughlin, senior broker at MF Global Ltd. in London. ``With the bearish economic outlook and manufacturing in freefall this accord is not good enough.''
OPEC President and Algerian Oil Minister Chakib Khelil said at a news conference that the cut will be ``100 percent effective'' in stabilizing prices.
U.K. Prime Minister Gordon Brown is ``disappointed,'' his spokesman told reporters in London. ``We're concerned by the decision. OPEC has a crucial part to play in the stability and recovery of the world economy.''
[End of excerpt]
Full story at link by Maher Chmaytelli and Margot Habiby// Bloomberg.com: Worldwide
Photo by Vladimir Weiss// Bloomberg News
