OPEC says to trim excess output and talk to Russia

Wed Sep 10, 2008 10:18am EDT
 
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By Barbara Lewis and Luke Pachymuthu

VIENNA (Reuters) - OPEC on Wednesday deepened its links with major non-OPEC producer Russia and said it was cutting back output by around half a million barrels per day.

Analysts said the group was seeking to support prices at around $100 after prices have plunged from a record of more than $147 in July to a five-month low below $102 on Tuesday.

Ministers of the Organization of the Petroleum Exporting Countries (OPEC) had been widely expected to stick to existing production allocations, which have been in place all year and are still theoretically unchanged.

There had been expectations real supply above targets would be discreetly pared back, although few had expected any change to be made public.

OPEC President Chakib Khelil said Wednesday's decision amounted to a cut from the group's actual July output.

"I think if you do your own calculation properly, it will be a lowering of production by about 520,000 barrels per day," Khelil said.

U.S. crude prices initially rose by around a dollar, but later slipped to around $103 a barrel, almost unchanged from the previous close.

RUSSIA MOVES CLOSER   Continued...

 
<p>Algerian Oil Minister and OPEC President Chakib Khelil arrives for a news conference after a meeting of OPEC oil ministers in Vienna September 10, 2008. REUTERS/Heinz-Peter Bader</p>