OPEC cuts oil production by 1.2 million b/d: Report

Organization of Petroleum Exporting Countries (OPEC) decided to cut production by a greater-than-expected 1.2 million barrels a day on Friday, and some members indicated it was open to further cuts.

United Arab Emirates oil minister Mohammed bin Dhaen al-Hamili made the announcement at a news conference after OPEC's oil ministers held an emergency meeting in the capital of Qatar.

He did not specify the amount of production that each member country would cut, but said the reductions will affect all countries except Iraq. It is to take effect Nov. 1.

The cuts will come from actual production levels, he said, and are more than 1 million barrels a day being called for earlier by OPEC members.

The cuts are the first time OPEC has trimmed its output since December 2004, when oil traded slightly above $40 a barrel and the OPEC lowered its official production quota by 1 million barrels a day.

However, many observers expect further production cuts in the near future.

Qatar's Energy Minister Abdullah bin Hamid Al-Attiyah said the OPEC's members are not excluding making further cuts.

Asked whether another cut could come in December, he said, "Everything is possible. We are working with the market and it is an open market."

Al-Hamili echoed the possibility, saying "We will monitor the market and review the situation and take a decision accordingly."

The organization's president, Edmund Daukoru of Nigeria, said talk of the possible need of a further 500,000-barrel cut was "in line with my own thinking," Dow Jones Newswires reported.

OPEC price hawks such as Nigeria and Venezuela have strongly advocated a OPEC-wide production cut since the start of the month.

But without public support from Saudi Arabia, the market took with a grain of salt the likelihood of any cuts. (*)