October 20, 2006 5:00 PM, EDT

Oil Falls to New Low for Year on Doubts OPEC Will Make Cut

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rude oil futures on Friday fell to a new low for the year, closing below $57 a barrel on the New York Mercantile Exchange among doubts that the Organization of Petroleum Exporting Countries would follow through with promised production cuts, Bloomberg reported.

OPEC on Friday announced it would slash oil production by 1.2 million barrels a day — about 4.4% of its total output — after markets shrugged off initial calls by consortium members for a 1 million barrel-a-day cut, Bloomberg said.

Crude oil fell $1.60 to close at $56.90 on the New York Mercantile Exchange, Bloomberg reported.

Prices have declined 27% since reaching a record high of $78.40 a barrel on July 14, Bloomberg said.

Saudi Arabia, the largest OPEC member, said it would reduce its output by 380,000 barrels a day, Bloomberg reported.

In addition, Bloomberg on Thursday quoted Abdullah bin Hamad al-Attiyah, Qatar’s oil minister, as saying the consortium could cut production by a further 500,000 barrels a day in December.