Oil producers to cut output

In London the price of North Sea Brent crude shot up to 13 dollars a barrel minutes after the announcement. Nuaimi and Pemex president Adrian Lajous announced the results of the accord, but did not say how the cuts would be spread out between the five countries.

Saudi Arabia had called the emergency talks in the Netherlands in an attempt to forge consensus over new cuts in oil production before the next OPEC meeting in Vienna on march 23.

The core decision for the cuts had been made Wednesday, when Saudi Arabia,Kuwait and Qatar 8212; all OPEC members 8212; and non-OPEC country Oman agreed on the need for cuts to eliminate excessive stockpiles of oil around the world. Saudi Arabia said before the Hague meeting that it would also seek to bring Iran an OPEC member and Norway a non-member into the initiative.

THE oil market cheered last week the latest effort by major oil producers to drain a world oil glut. Crude futures for April delivery broke through 15.00 a barrel on Friday for the first time in five months after top oil producers meeting in the Hague in the Netherlands announced a deal to cut production by more than two million barrels per day bpd, about 3 per cent of the daily world output.

But officials held back important details, such as how much each country would cut, and crude futures quickly forfeited most of their early advances. April futures ended last Friday8217;s session at 14.49 a barrel, up 18 cents, after hitting a high of 15.11.

Meanwhile, major oil companies8217; shares, which had followed oilprices sharply higher in recent days, were mixed. The Standard amp; Poor8217;s Oil and Gas Index, which tracks oil prices most closely, rose 0.69 to 49.30, while the broader Samp;P 500 share index fell about 3.09 points to 1,294.59.

The major international integrated oil companies index, which includes concerns like Exxon Corp, dropped about 5.09 points to 867.35. quot;When you look at the major oil companies, more than half are down today,quot; said Frank Knuettel of Paine Webber. quot;There was obviously some disconnect between oil prices and oil stocks, and that8217;s because investors are extraordinarily skeptical 8212; not only with this agreement, but with OPEC historically.quot;Almost exactly a year ago, Saudi Arabia and Venezuela, heavyweight members of the Organization of Petroleum Exporting Countries, teamed with non-OPEC producer Mexico for talks in Riyadh, Saudi Arabia, which ultimately led to two agreements to cut worldwide supply by a total of 3.1 million bpd.The talks rescued oil prices, sending oil futures from below 13 toalmost 17 a barrel, but only temporarily. By December, prices hit a 12-year low of 10.35 as cheating on the agreements and a sharp rise in exports from Iraq left the market awash in oil.