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| Opec plans record oil output cut | Opec plans record oil output cut |
| (about 2 hours later) | |
| The oil cartel Opec is set to agree to a record cut in oil output of two million barrels a day. | The oil cartel Opec is set to agree to a record cut in oil output of two million barrels a day. |
| Saudi Arabia's oil minister Ali al-Nuaimi said there was "a consensus on a cut of two million barrels" as the meeting got underway in Algeria. | Saudi Arabia's oil minister Ali al-Nuaimi said there was "a consensus on a cut of two million barrels" as the meeting got underway in Algeria. |
| Non-members Russia and Azerbaijan have also announced they have cut their output by 600,000 barrels a day. | |
| The total, of 2.6 million barrels, adds up to 3% of global output. Opec hopes this will curb the slide in oil prices. | The total, of 2.6 million barrels, adds up to 3% of global output. Opec hopes this will curb the slide in oil prices. |
| Crude oil prices have slumped from a peak of $147 a barrel in July to about $44 a barrel, as demand has weakened amid the global economic downturn - especially in recession-hit industrialised nations. | Crude oil prices have slumped from a peak of $147 a barrel in July to about $44 a barrel, as demand has weakened amid the global economic downturn - especially in recession-hit industrialised nations. |
| Saudi Arabia, the world's biggest oil exporter, has been pushing for an output cut, and has led by example - reducing supplies to customers even before any cut was agreed. | Saudi Arabia, the world's biggest oil exporter, has been pushing for an output cut, and has led by example - reducing supplies to customers even before any cut was agreed. |
| Meanwhile, Russia's deputy Prime Minister Igor Sechin has said the country is considering becoming a full member of Opec. | Meanwhile, Russia's deputy Prime Minister Igor Sechin has said the country is considering becoming a full member of Opec. |
| Russia was looking at different options for co-operation with Opec, ranging from observer status to full membership, he said. | Russia was looking at different options for co-operation with Opec, ranging from observer status to full membership, he said. |
| "Russia shares the top spot with Saudi Arabia in terms of oil production, so it is only natural that we should develop this co-operation," he said. | "Russia shares the top spot with Saudi Arabia in terms of oil production, so it is only natural that we should develop this co-operation," he said. |
| Cutback hopes | Cutback hopes |
| However, while Russia and Azerbaijan have announced cutbacks totalling 600,000 barrels a day, these are not additional reductions as they have already taken place. | |
| Russia has said its cutbacks were already implemented in November, while Azerbaijan's output had already been reduced by about a third due to production problems earlier this year. | |
| Before the meeting, there was agreement among many oil ministers that Opec need to make a drastic production cut. | Before the meeting, there was agreement among many oil ministers that Opec need to make a drastic production cut. |
| Opec's problem is the result of the worldwide economic downturn Andrew Walker, BBC economics correspondent | Opec's problem is the result of the worldwide economic downturn Andrew Walker, BBC economics correspondent |
| Nigeria's oil minister, Odein Ajumogobia, said he would support a cut of two million barrels a day. | Nigeria's oil minister, Odein Ajumogobia, said he would support a cut of two million barrels a day. |
| "I would give such a proposal serious consideration. It's in everyone's interest for supply and demand to be better aligned. They are clearly not at the moment." | "I would give such a proposal serious consideration. It's in everyone's interest for supply and demand to be better aligned. They are clearly not at the moment." |
| The Iraqi oil minister, Hussain al-Shahristani, agreed that at least two million barrels a day of oil production needed to be cut. | The Iraqi oil minister, Hussain al-Shahristani, agreed that at least two million barrels a day of oil production needed to be cut. |
| In terms of prices, he said he was hoping for a target oil price of "somewhere between $80 to $100". | In terms of prices, he said he was hoping for a target oil price of "somewhere between $80 to $100". |
| The International Energy Agency recently forecast that global demand for oil would fall this year, the first decline since 1983. | The International Energy Agency recently forecast that global demand for oil would fall this year, the first decline since 1983. |
| However, the fall in the price of oil has been helpful for central banks, especially in the developed countries. | However, the fall in the price of oil has been helpful for central banks, especially in the developed countries. |
| It has eased their concerns about inflation and left them free to tackle their slowing economies by cutting interest rates. | It has eased their concerns about inflation and left them free to tackle their slowing economies by cutting interest rates. |
| The BBC's economics correspondent Andrew Walker said: "Opec's problem is the result of the worldwide economic downturn." | The BBC's economics correspondent Andrew Walker said: "Opec's problem is the result of the worldwide economic downturn." |
| "Oil use has declined in the developed countries, and is growing more slowly in developing economies," he said. | "Oil use has declined in the developed countries, and is growing more slowly in developing economies," he said. |
| On Tuesday, US light, sweet crude fell 18 cents to trade at $44.33 a barrel. | On Tuesday, US light, sweet crude fell 18 cents to trade at $44.33 a barrel. |
| Brent crude rose 55 cents to $45.15 a barrel. | Brent crude rose 55 cents to $45.15 a barrel. |