11th September 2008, 10:01 WST
With oil prices falling below $US100 per barrel this week, oil producer group OPEC decided to cut production to prevent a further drop, despite an economic crisis in consumer countries.
"It looks like they are willing to defend 100 dollars (as a floor)," Mike Wittner, an analyst at Society Generale, commented following Tuesday's OPEC decision.
Oil prices topped a record $US147 in July but have since fallen some 30 per cent, dropping below the symbolic $US100 mark for the first time in five months on Tuesday, as the Organisation of Petroleum Exporting Countries was meeting in Vienna.
"The market was coming down very dramatically but I hope it will relax now," OPEC Secretary General Abdullah al Badri told journalists Wednesday after the cartel's 13 members agreed to cut excess production by 520,000 barrels per day (bpd).
The White House expressed its disapproval of the decision Wednesday, with spokeswoman Dana Perino telling reporters: "We would like to see more oil on the market, not less."
The oil producers maintained their official output quotas at Tuesday's meeting, although the total figure dropped to 28.8 million barrels per day after Indonesia suspended its membership of the group
The Associated Press
September 22, 2008 at 4:24 PM EDT
NEW YORK " Oil prices leaped more than $25 (U.S.) a barrel Monday " the biggest one-day price jump ever " as anxiety over the U.S. government's $700-billion bailout plan, a weak dollar and an expiring crude contract ignited a dramatic rally.
Light, sweet crude for October delivery jumped as much as $25.45 to $130 a barrel on the New York Mercantile Exchange before falling back to settle at $120.92, up $16.37. The contract expired at the end of the day, adding to the volatility as traders rushed to cover positions; the October price began accelerating sharply in the last hour of regular trading, a common occurrence when a contract is about to go off the board.