OPEC plans to cut output

Hong Kong, October 5 :

The Organisation of Oil Exporting Countries (OPEC) cartel has agreed informally to cut oil output by one million barrels a day or four per cent in order to bolster prices which have fallen some 25 per cent from record levels in July, the Financial Times reported today.

The newspaper reported that the majority of the 11-member OPEC back a voluntary reduction and the deal could be ratified as early as a mid-December meeting in the Nigerian capital of Abuja.

An unnamed OPEC official said in the report that the group “is going to defend a price floor for its oil of $50 to $55 a barrel.”

The price of OPEC’s reference crude yesterday was $55.27.

The benchmark US light crude contract for November was quoted at above $60 in early Asian trade, recovering from sharp overnight losses.

The Financial Times reported that Saudi Arabia, the world’s top producer and OPEC’s most important member, is unhappy with the move towards voluntary cuts even though it has quietly cut its output by 200,000 bpd over the past two months.