OPEC slashes oil output but price dives on recession fears

VIENNA: OPEC slashed its oil output by 1.5 million barrels a day from November 1 at an emergency meeting on Friday, but failed to shore up the oil price which plunged in a gathering storm of recession.

Analysts had expected the Organization of Petroleum Exporting Countries to cut its daily output by at least one million barrels per day as a global economic slowdown amid a worsening financial crisis slashes demand for energy.

Global stock markets plunged on Friday, with London losing more than nine percent as it struck a five-year low on news that Britain's economy shrank in the third quarter, placing it perilously close to a recession.

OPEC, which produces 40 percent of world crude, announced a cut to production in a bid to support crude prices which "have witnessed a dramatic collapse - unprecedented in speed and magnitude," according to an official statement.

Yet after the cartel agreed to slash output to 27.3 million barrels per day, the price of Brent North Sea crude sank close to 61 dollars, the lowest point for 17 months. Sunday AFP