Opec to make first oil output cut since 2004

Opec will take one million barrels of oil a day off oversupplied world markets as soon as possible with its first output cut in more than two years, Opec officials said yesterday, sending oil prices back above $60.

The world's biggest oil exporter Saudi Arabia will shoulder most of the burden as Opec moves to address a 23 per cent drop in prices since July 14 and fuel stocks at a seven-year high in top consumer the United States, a senior Opec delegate said.

The organisation that pumps over a third of the world's oil will curb supplies by just over three per cent. It may make deeper cuts at its meeting on December 14 in Abuja, another official said.

"The goal now is to cut actual oil production by one million barrels daily as soon as possible but the exact date is still being worked out," the senior Opec delegate said.

The US was dismayed by the news. Energy Secretary Sam Bodman said he would tell Opec ministers the world still needed all the oil Opec could pump heading into winter. He said $60 a barrel oil was profitable for producers.

"We still need oil for sure. We still need all the oil we can get," Mr Bodman said in a telephone interview.

Nine Opec countries will take part in the supply curbs and will cut their "fair share" from overall Opec production, the senior delegate said. Opec pumped 29.47 million bpd in September, according to a Reuters survey.

Only Iraq, exempt from quotas, and Indonesia, a net importer, will not participate, he added.