OPEC May Cut Oil by 1 Million Barrels

The Organization of Petroleum Exporting Countries is nearing an accord to cut crude oil output by 700,000 to 1 million barrels per day, wire services reported Thursday.

Earlier this week, market analysts had looked for a production cut of at least 500,000 barrels daily.

Oil ministers from OPEC nations -- which account for 40% of the world’s oil output -- meet in Vienna on Friday to discuss ways to raise oil prices that have sunk in recent months along with the global economic slowdown. OPEC is trying to keep the benchmark crude price at $25 per barrel.

The trucking industry and U.S. economy have enjoyed a general decline in fuel prices so far this year. Last week, the price for diesel was 140.6 cents, the lowest since May 8, 2000.

However, the weakening U.S. economy has hit the oil cartel's growth markets in Asia, Reuters said. This, along with oil prices falling below the target of $25 per barrel, has brought concern among producers that oil prices could even nosedive.

Therefore, OPEC is planning the production cut to head off a plunge in prices similar to what took plunge in the late 1990s when many countries overseas tumbled into recession.

If a production cut lifts oil prices higher, truck and delivery van drivers would soon see an end to their falling motor fuel costs and have to face higher diesel or gasoline prices at a time when freight shipments remain weak.

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