OPEC cuts output by 2.2 million barels
Crude oil for January delivery is down $2.20, or 7%, to $41.40.
The OPEC oil cartel has decided to cut its oil output by 2.2 million barrels a day from current output, or 4.2 million barrels a day from September levels, the Wall Street Journal reported on its Web site Wednesday.
The new cut is effective from January next year, Iraq’s oil minister said, according to the Journal.
OPEC, which controls about 40% of the world’s oil production, was widely expected to deliver a cut of about 2 million barrels a day. See full story.
The Organization of Petroleum Exporting Countries will cut output from a daily level of 29.045 million barrels three months ago, indicating a new quota target of 24.845 barrels a day.
OPEC, which produces more than 40 percent of the world’s oil, will next meet again in March 2009. Chakib Khelil, the group’s president, said OPEC has no oil-price target.
Oil’s $100-a-barrel collapse from July’s record prices has curbed revenue for producers, threatening government budget shortfalls. Saudi Arabia’s King Abdullah said last month that his country needs crude at $75 to spur investment.
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