October 24, 2008
Oil price falls despite supply cut by producers
Oil producers this morning unanimously voted to cut their output by 1.5 million barrels a day, following an emergency meeting in Vienna to discuss the plunging price of crude.
The Organisation of Petroleum Exporting Countries (Opec), which is responsible for 40 per cent of the world's production, said the cut, which was more than the one million barrel forecast, would come into effect from November 1.
While a fall in daily output is expected to increase the price of oil, Brent North Sea crude slumped to a 17-month low of $61.08 a barrel and New York prices declined to $63.05 after concerns about the global economy's march towards recession overode fears about shrinking fuel supply.
Ministers from the oil producing nations are thought to be keen to push prices above $70 a barrel, although they said this morning that they had not set a price target.
Oil has plunged by more than 50 per cent from July's record high of $147 as the global financial crisis bit into energy demand in the US and other industrial countries.
British supermarket groups have been passing on the falling price of oil to its customers, as part of a price war on the forecourts which yesterday saw additional reductions by Sainsbury's and Asda, reducing a litre of unleaded to 94.9p.