CAIRO, Egypt -- After more than a month of uncertainty, the Organization of Petroleum Exporting Countries confirmed Friday it would cut its official output by 6 percent in an effort to firm up sagging oil prices and protect its member nations' main source of income.
In an emergency meeting, OPEC ministers agreed to lower output quotas by a combined 1.5 million barrels a day beginning yesterday. The cuts are to last for at least six months, OPEC officials told a news conference.
The decision appears unlikely to have a major impact on the prices consumers pay for gasoline or heating oil. OPEC approved the cut in principle back in November, and energy markets have already factored it into current prices for crude and refined oil products.
OPEC decided to proceed with the planned cuts only after persuading rival, independent producers such as Russia and Norway to reduce their own output. Having already trimmed the cartel’s official production by 3.5 million barrels a day this year, its 11 member nations were determined to make independent producers share the burden of the next decrease instead of increasing their market share at OPEC's expense.
"The main task for us at this moment is the stabilization of the market," OPEC Secretary-general Ali Rodriguez (pictured) told reporters. Oil producers have suffered "a sustained drop" in crude prices during the past month, he said. "If we maintain this trend, we can suffer a collapse in the price. It's a very big problem for producers and even for consumers."
