OPEC cuts record 2.2 million barrels a day

[Dantheman62]

OPEC cuts record 2.2. million barrels a day
Wednesday December 17, 12:43 pm ET
By George Jahn, Associated Press Writer
OPEC cuts record 2.2 million barrels a day from output -- Russia keeps its distance from group


ORAN, Algeria (AP) -- OPEC on Wednesday agreed to slash a record 2.2 million barrels from its daily production as of Jan. 1, while the bloc's outsiders Russia and Azerbaijan announced their own cutbacks of hundreds of thousands of barrels from the market.



Oil prices tumbled close to four-year lows after the announcement, however, a clear indication of the growing belief that the world is heading for a long and painful recession in which energy use will continue to erode.

In just five months, crude has given up all of the price gains made over the past four years.

Crude sank to $40.20 after the announcement, a price not seen since the summer of 2004.

Making matters worse for OPEC, Moscow distanced itself from direct ties with the 13-nation producers' group, further dampening OPEC hopes of coordinated production cuts that might put a floor under crude prices.

OPEC said oil ministers of the 11 nations under the group's quota system agreed to take 4.2 million barrels a day off the market, but that includes two previous announced cuts that totaled 2 million barrels.

That leaves the new output reduction announced Wednesday at 2.2 million barrels -- the largest single production cut ever.

Still, even the record cut was unable to counterbalance consumers' concerns about the dismal world economy.

http://biz.yahoo.com/ap/081217/af_opec_meeting.html

[ENdJOY]

no doubt, they cut their production, because oil went below $40 a barrel today