'Opec cut won't harm economy'

Vienna - Kuwait's Oil Minister Mohammad al-Olaimoil told reporters on Friday that Opec will cut crude output by a "wise" amount so as "not to affect" the world economy which faces a recession.

The Organisation of Petroleum Exporting Countries is shortly to begin an emergency meeting in Vienna. Analysts expect that the cartel will cut oil output by at least one million barrels per day as it bids to support plunging crude prices.

Opec, which produces 40% of the world's oil, is set to reduce its production despite deep opposition by Western leaders.

British Prime Minister Gordon Brown said recently that any reduction made in a bid to push up oil prices would be "scandalous" at a time when major economies are close to recession.

However ahead of the gathering, Iran - Opec's second-biggest oil exporter - and Libya both called for a reduction of two million barrels per day, while Venezuela said there should be a cut of at least one million barrels.

Opec's official output quota stands at 28.8 million barrels per day.

The price of New York oil dived on Thursday to a 16-month low point, as recession fears stoked concerns about falling crude demand, traders said.

New York's main contract, light sweet crude for December delivery, sank as low as $65.90 per barrel on Thursday - a level last seen on June 13, 2007.

Crude futures in New York and London have plunged 56% from record highs of above $147 a barrel reached only three months ago when supply concerns sent prices soaring.

Opec's Gulf state members led by Saudi Arabia, the world's biggest oil exporter, could oppose a reduction of more than one million barrels as they look to partially satisfy consumers' concerns, analysts said.

- AFP