afrol News, 15 December - The oil producing countries have decided to reduce oil output quota to counter the oil pricing downtrend, Algerian Energy and Mining Minister and Organisation of Petroleum Exporting Counties President Chakib Khelil has announced today.

According to local news agency, Algerie Press Service, during the OPEC summit held in Oran, 432 kilometers west of the capital, Algiers, the cartel reaffirmed the cut, saying the demand will continue falling in the next year.

In November, OPEC cut out oil output by more than 800,000 barrels per day, and the proposed cut could cut close to two million barrels per day.

"Everybody is supporting a cut, I have no doubt about that," he declared saying the demand for oil is likely to drop with an added 500,000 or more barrels per day.

During the first quarter of 2009, oil will drop by 200,000 barrels, then by 1.2 million barrels in the second one, making up a reduction of 1.4 million barrels in the first two quarters, stating that it will go up again during the third and fourth quarters, according to APS.

Mr Khelil said the best way to get a reaction from the oil market is to surprise the markets, saying a major cut would help gauge the demand for oil.

Reports have revealed that the global oil demand next year will be the weakest in more than two decades, though not revealing figures expected in the first quarter of 2009.

Oil market analysts have said Saudi Arabia, the major oil producer in the 13 member block, accounting for more than one-third of OPEC's total production, will be forced to shoulder most of the cutting burden.

OPEC's moves to lead in production have been drowned out by a surge of depressed economic data from around the world, seeing oil prices tumbling down to US $40 a barrel, the lowest recorded in since 2004.

Analysts say the challenge now facing OPEC is whether the group could sent a strong message to arrest the declining oil prices reported to have dropped by more than 60 percent from a record high in July.

By staff writer

© afrol News

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