OPEC to cut crude output

by The Associated Press

OPEC oil ministers agreed formally July 25 to cut crude oil output by 1 million barrels a day, or 4 percent of their official target level. The decision by all 11 members of the Organization of Petroleum Exporting Countries is aimed at supporting crude prices at around $25 a barrel in the face of eroding demand in the group’s key markets in the United States, Europe and Asia. The cut is to take effect Sept. 1.

Energy analysts said the move would indeed shore up prices, but not to the point of causing serious pain for consumers in importing countries.

“You will see a temporary rally,” said Edward Ennis of SG Securities in London. “It will not stop the decline in crude price.”