OPEC Agrees To Cut 1.2 Million Barrels a Day
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OPEC, the producer of 40% of the world’s crude oil, agreed to cut production by 1.2 million barrels a day to stem a three-month slide in prices.
The Organization of Petroleum Exporting Countries will make the cuts starting November 1, United Arab Emirates Oil Minister Mohamed al-Hamli said following a meeting of member countries in Doha, Qatar. The reductions will be based on how much members are pumping rather than quotas, said Mr. al-Hamli, who will become OPEC president in 2007.
The producer group is trimming output to halt a 25% slide in oil prices since a record $78.40 a barrel was reached in New York in July. Oil prices rose yesterday after Saudi Arabian Oil Minister Ali al-Naimi said the group would “absolutely” cut 1 million barrels a day.
Crude oil for November delivery rose 85 cents, or 1.5%, to close at $58.50 a barrel on the New York Mercantile Exchange. Prices have dropped 2.6% since the 1 million barrel-a-day cut was announced October 5.
