Opec cuts oil output
Friday 24 October 2008
Oil fell below $64 a barrel today, to new 16-month lows, as gloom about a global economic downturn took the steam out of an Opec agreement to cut output by 1.5 million barrels a day.
Ministers of the Organization of the Petroleum Exporting Countries agreed at an emergency meeting in Vienna to take 1.5 million barrels per day off the market.
US light crude for December delivery was down $3.23 at $64.61 a barrel by 0928 GMT.
London Brent crude was down $3.41 at $62.51.
Saudia Arabia's Oil Minister Ali al-Naimi said the group had agreed the output reduction with effect from 1 November.
But news of the Opec action did not halt oil's slide.
"Already we've seen demand destruction of 2 million barrels per day. I'm not convinced this cut will be enough to stop the slide." said Rob Laughlin, at broker MF Global.
"We need to see what they plan on doing later this year."
Oil has plunged more than 50 per cent from its record high above $147 in July, as demand has dropped in the United States, the world's biggest energy consumer, and other industrial countries.
"We believe this week will mark the start of a new quota reduction cycle by Opec and it will continue through 2009," Deutsche Bank analyst Michael Lewis said in a note.
"However, we believe production cuts will not rescue the oil price," he said. "We target WTI (US) crude oil prices hitting $50 a barrel next year."
Analysts polled by Reuters had expected Opec to reduce output by between 1 million and 1.5 million barrels per day.
Investors are increasingly pessimistic about the world economy, illustrated by sharp falls in European and Asian stocks today, led by around a 10 per cent drop in Japan's Nikkei average.
- 1 Apple has installed security backdoors on 600m iPhones and iPads, claims security researcher
- 2 UK pirates will get four warning letters a year
- 4 Is Gideon Levy the most hated man in Israel or just the most heroic?
- 5 Israel-Gaza conflict: Deadly flechette shells 'used by Israeli military in Gaza Strip’
Hacking Trial: Rebekah Brooks, Raisa and a new twist in the saga of a horse fit for a Prime Minister
Israel-Gaza conflict: Palestinian death toll now exceeds 500 – but Israel fights on
Income tax league: Revealed - the UK towns where people pay the most and least tax
Israel-Gaza conflict: Deadly flechette shells 'used by Israeli military in Gaza Strip’
Malaysia Airlines MH17 crash: Blogger captures footage ‘showing BUK missile launcher that shot down jet’ now back in Russia
Malaysia Airlines flight MH17 crash: 'Nine Britons, 23 Americans and 80 children' feared dead after Boeing passenger jet is 'shot down' near Ukraine-Russia border
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: victims’ bodies bundled in black bags and loaded onto trains
iJobs Money & Business
£850 - £950 per day: Orgtel: Programme Director - Conduct Risk - Banking - £85...
£45000 - £50000 Per Annum + excellent benefits: Clearwater People Solutions Lt...
£250 - £300 per day + competitive: Orgtel: Finance Manager - Accountant - Bank...
£100000 - £120000 per annum + BONUS + BENEFITS: Harrington Starr: A leading fi...