World crude prices were mixed in cautious trade today after OPEC said that its members would cut their combined output by one million barrels a day in November.
Prices had shown heavier losses earlier in the day, and the later firming in New York crude indicated that the OPEC announcement was lending some support.
New York's main contract, light sweet crude for delivery in November, added eight cents to $58.60 a barrel in pit trading. It had earlier dropped below $58 to $57.87. In London, Brent North Sea crude for November delivery slid 28 cents to $59.06 a barrel in electronic deals.
The 11 members of the OPEC oil cartel have agreed to slash output by a million barrels a day, the OPEC president said today, in a move aimed at shoring up sliding world crude prices. However, the OPEC secretariat in Vienna could not confirm that an accord had been struck.
The oil market has been waiting more than two weeks for a clear signal from OPEC in reaction to a 25% plunge in crude prices in the last two months. Crude futures had slumped by over $1 yesterday as traders cast doubt on the chances of the OPEC cartel cutting its production.
OPEC members have acted in a bid to support prices, which have tumbled from record highs above $78 a barrel reached in July and August.
Elsewhere today, the IEA shaved its forecast for growth of global oil demand this year and next. The International Energy Agency said in its monthly report that a possible OPEC output cut, global instability and growth in China were likely to keep the market under tension, even though prices had fallen because of stockbuilding and slowing demand.
The agency forecast an increase of 1.2% in global oil demand this year to 84.6 million barrels a day and a 1.7% rise in 2007 to 86 million barrels a day. This was lower than its previous growth estimate of 1.3% in 2006 and 1.8% in 2007.
Meanwhile, the weekly update on energy inventories in the US is due tomorrow, one day later than normal owing to Monday's Columbus Day holiday.
