OPEC cuts oil production to hold prices

Dec. 13, 2004 at 10:34 AM
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CAIRO, Dec. 13 (UPI) -- The oil producing OPEC cartel Monday began reducing its oil output to maintain prices around current levels, the Wall Street Journal reported.

The Organization of Petroleum Exporting Countries Friday announced a supply cut of 1 million barrels a day, effective Jan. 1. That marks a reduction of about 3.6 percent from current output of some 28 million barrels.

The largest oil producer, Saudi Arabia, agreed to slash its output by 500,000 barrels a day, or half of OPEC's supply cut, bringing its production down to some 9 million barrels a day.

The oil price remains at more than $40 a barrel for U.S. benchmark crude, up about a third from the average of $31 a barrel last year and OPEC wants to keep it there.

The International Energy Agency had urged OPEC to refrain from restraining supplies and let inventories in consumer countries build up to healthier levels.

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