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OPEC Agrees on Sharp Output Cut, Oil Slide Goes On

Reuters [1]
Friday, Oct 24, 2008

An emergency OPEC meeting on Friday reached swift agreement to chop production by 1.5 million barrels per day (bpd) in an effort to halt a deep oil price slide.

International benchmark U.S. crude has slumped by close to 60 percent from a record high of $147.27 hit in July.

On Friday, it fell again to below $63 a barrel.

“The decision was straightforward,” Saudi Oil Minister Ali al-Naimi said after the meeting. “OPEC will do whatever is necessary to balance oil markets.”

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In the world’s biggest energy consumer the United States, oil prices and economic weakness have been major factors in the run-up to the November presidential election.

  • A d v e r t i s e m e n t

Washington was quick to criticize OPEC’s decision.

“It has always been our view that the value of commodities, including oil, should be determined in open, competitive markets and not by these kinds of anti-market production decisions,” White House spokesman Tony Fratto said.

For the Organization of the Petroleum Exporting Countries, the speed of the oil market’s collapse after a record rally has stirred memories of the Asian financial crisis in the late 1990s.

Full article here [1]