OPEC Cuts Oil Production

Bid to halt price slide after summer high
By Peter Fearon,  Newser Staff
Posted Sep 10, 2008 2:23 AM CDT
OPEC Cuts Oil Production
An oil worker climbs the steps of a new oil rig being drilled in the Sakhir, Bahrain, desert during sunset . OPEC is cutting production to halt a drop in oil prices.    (AP Photo)

The international oil cartel OPEC announced today it's reducing production by more than half a million barrels a day, the Financial Times reports. The decision by the cartel, which controls 40% of world oil production, stunned most analysts. The move comes as oil prices, after spiking to an all-time high in July, have dropped 30%, bringing relief to many world economies.

Prices have dipped significantly in recent weeks driven by lower demand, increased supply and a stronger US dollar, said an OPEC statement. “All indicates a shift in market sentiment causing downside risks to the global oil market outlook,” the statement added. OPEC now faces the difficult task of ensuring members abide by its decision. A significant portion of the reduction will have to come from Saudi Arabia, which boosted production unilaterally this summer when prices were high. (More OPEC stories.)

Get breaking news in your inbox.
What you need to know, as soon as we know it.
Sign up
Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.