OPEC group agrees to cut output to hold up oil price
Six OPEC oil ministers agreed in principle yesterday to a temporary production cutback designed to keep the cartel's $29-a-barrel price from collapsing.
The plan will be presented at an emergency meeting of all 13 OPEC oil ministers scheduled for Monday. Talks are being held in the wake of a $2 -a-barrel cut by Nigeria, an OPEC member.
Sources said the cartel members agreed to cut production by 3 million barrels a day through November, when winter heating demand for oil will be felt. Saudi Arabia, OPEC's largest producer, would reportedly absorb half the proposed cutback.
It will be difficult for OPEC to decide how large a cut other members must make, analysts say. If production is cut by 3 million barrels, OPEC has a 50-50 chance to stem the recent oil price erosion, analysts say.