Opec mulls output cut

A slump in demand is pushing down prices

The Organisation of Petroleum Exporting Countries (Opec) may cut output of crude oil by 1 million barrels a day, according to the oil cartel's secretary general Ali Rodriguez.

The price of oil has been falling and many analysts are expecting Opec to take action to shore it up.

In October, Qatar's Oil Minister, Abdullah al-Attiyah said there was a "strong movement" within Opec to cut output to stabilise dropping oil prices.

Now Mr Rodriguez has said a cut of 1 million barrels is "a possibility", though he stressed that "any firm decision will be decided on November 14."

"Opec is facing several problems: the economic downturn, oversupply and high stocks, not only for oil but also products, which has had a negative impact on price," said Mr Rodriguez.

If at first you don't succeed...

If Opec cuts output at its November meeting it will be the fourth cut this year in a bid to stem the slide in oil prices, which are down about 30% since mid-September.

Global demand for oil is predicted to shrink sharply this winter, according to the International Energy Agency.

But a cut in output could be politically sensitive as the world's major economies are struggling to stave off recession.

Opec's target price is about $25 a barrel.

December Brent crude was trading in London at about $19.10 a barrel early on 5 November but swiftly rose on prospects of an output cut.

By 0900 GMT, December Brent crude was trading at $19.95 a barrel in London.