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OPEC cuts oil production
VIENNA, Austria -- OPEC has agreed to cut worldwide oil production while increasing quotas for its 11 member countries. The Organisation of Petroleum Exporting Countries made the announcement after meeting in Vienna on Thursday. Oil production has breached quotas by up to three million barrels per day (bpd) over its formal supply target of 21.7 million bpd. While cutting the oil overproduction, OPEC also raised its formal output target to 23 million barrels a day, Algerian Oil Minister Chakib Khelil told Reuters, to take effect from January 1. The agreement means the cartel will aim to cut actual production by 1.5-1.7 million bpd, Kuwaiti Oil Minister Sheikh Ahmad al-Fahd al-Sabah said. By boosting the quotas of all its member countries, the group aims to legitimise some of its current overproduction. Delegates fear oversupply of the market ahead of a seasonal, post-winter dip in demand, The Associated Press reported. OPEC President Rilwanu Lukman said OPEC was insisting that producing countries cut excess production above the authorized target level. The delegates were to ratify the decision at a formal session later in the day at the cartel's headquarters in Vienna, The Associated Press reported. Saudi Arabia, the world's biggest oil producer, had urged other OPEC members to back its plan to reduce excess supplies and maintain prices at three-year highs. Oil spiked in Asia on Thursday and continued to rise in early London trading after Venezuelan production fell to less than one-third of daily output as a strike in protest of President Hugo Chavez entered its eleventh day. Reuters contributed to this report.
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