OPEC agrees to a major cut in production

The OPEC cartel agreed on Wednesday to cut production by 2.2 million barrels a day, the group’s largest ever cut, in an attempt to put a floor on oil prices.

After riding a wave of rising oil prices for nearly a decade, the world’s top exporters are struggling amid a weakening global economy, a dizzying slump in oil consumption and a sharp downfall in prices.


It is the third time producers reduce their output in as many month. Since September, members of the Organization of the Petroleum Exporting Countries have pledged cuts totaling 4.2 million barrels a day, or nearly 12 percent of their capacity, a record in such a short time.

“OPEC’s decision takes into account the destruction of demand, and takes into account the long term interest of the oil industry to make sure we are still going to be having investments in the sector,” Chakib Khelil, OPEC’s current president, said at a news conference after the meeting, which was held under tight security in the coastal Algerian town of Oran.

Khelil said the group wanted to “eliminate” an overhang of commercial oil inventories, which now stand at 57 days of supplies, down to 52 days. He said he hoped the move would help stabilize prices, and eventually push up them up to around $80 a barrel in the long term.

IHT