The Organisation of Petroleum Exporting Countries has decided to slash its oil output by more than expected, as it seeks to reverse heavy falls to crude prices.
OPEC, which produces just over a third of the world's oil, said it would cut current production by 1.2 million barrels per day (bpd) to 26.3 million bpd from November 1, following an extraordinary meeting in the Qatari capital Doha.
It added that the measure was taken after noting that oil supplies were well in excess of demand. OPEC members had suggested ahead of the meeting that the cartel would carry out a cut of one million bpd in a bid to shore up flagging crude prices.
The cartel decided to cut current output, which is below its official quota of 28 million bpd. The official quota remains at 28 million bpd, where it has stood since July, 2005.
The cartel had last week agreed in principle to a one million bpd cut as oil prices have fallen to below $58 a barrel in recent days.
Following the OPEC move, oil prices fell below $58 a barrel today, even though OPEC made a deeper output cut than expected, on concerns that some of the group's members may fail to comply with the curbs.
US crude fell 65 cents to $57.85 a barrel late this afternoon, less than $1 above the 2006 low touched a week ago. London Brent crude fell 69 cents to $60.18 a barrel.