Oil producers pull lever for huge output cut

Oil producers pull lever for huge output cut


OPEC, supplier of more than 40% of the world’s oil, agreed to cut production quotas by a larger- than-expected 9% from current output quota of 27.3 million barrels a day to revive prices as a global recession reduces demand for crude. Opec and non-Opec oil exporters took action on Wednesday that could remove up to 2.6 million barrels of oil from the market in a bold bid to boost prices and producers' incomes. Crude oil fell as low as US$39.88 a barrel in New York , the lowest since July 2004, on skepticism OPEC will adhere to its new agreement and after a government report showed rising U.S. crude stockpiles. Russia , the biggest oil exporter outside of OPEC, has also pledged to curb exports too, as it did a decade ago when oil sank toward $10 a barrel. Despite the cut in oil production the crude oil prices could not be revived thus sending a signal of economic slow down in major oil importing countries.