Oct. 24, 2008
The Organization of Petroleum Exporting Countries cut oil production targets for the first time in almost two years as the group battles to slow a collapse in prices.OPEC decided to lower supply by 1.5 million barrels a day from November, oil ministers said today at the end of a meeting at the group’s Vienna’s headquarters. The reduction will be from the existing quota for 11 members of 28.8 million barrels a day.
"Demand is significantly less than what is being supplied, that is the reason the cut was taken," Saudi Arabian Oil Minister said after the meeting. Crude oil has tumbled 56 percent from a July 11 record of $147.27 a barrel as the financial market crisis spreads, job cuts increase and fuel consumption slows.
"The high oil prices from the past years contributed to the slowdown in demand and the subsequent downturn in the economy," White House spokesman Tony Fratto said in a statement, which also criticized OPEC’s policy of restricting supply. The International Energy Agency said that demand among industrialized nations will fall 2.2 percent this year.