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OPEC moves to calm fears of oil cuts

OPEC, the oil producers` cartel, has moved to calm fears that it was poised to restrict supply output after prices hit a five-month low last week. The Organisation of Petroleum Exporting Countries said it would not consider cutting its quotas at a meeting next month unless the price fell sharply - even though supply was outstripping demand.

Sheikh Ahmad al-Fahd al-Sabah, OPEC`s president, said: "I don`t think there is an idea to cut production in our December meeting unless prices will be in a very bad situation." The oil price fell 2.7 per cent in New York on Friday, briefly dropping below $56 a barrel for the first time in five months, as figures showed that refiners had managed to build up a large stockpile of reserves. It is a pronounced fall from the record of $70 hit in August.

The comments came at a meeting of the International Energy Forum in Riyadh. The UK was represented by Gordon Brown, the Chancellor, who continued to push the five-point plan that he and fellow G7 finance ministers drew up in September. He advocated increased supply from Opec, greater transparency over production and reserves volumes, an increase in infrastructure investment and improved energy efficiency.