OPEC members Nigeria, Venezuela to cut output

Two of the 11-member OPEC, Nigeria and Venezuela, have announced their intention to cut back on oil production in a bid to stem falling oil prices. In the last two months prices of oil have come down by nearly 20 per cent from their peak of $77 two months ago.

Both countries said that their production cuts were part of an informal agreement to bring down production if oil prices declined.

Nigerian oil minister, Edmund Daukoru, who is the OPEC president this year, recently was recently quoted as having said that the price of oil was "very low," while Venezuela's president Hugo Chavez says the "appropriate" price for oil was $50-60 a barrel.

The proposed cutback between the two OPEC members would translate to around 170,000 barrels a day, with Nigeria's proposed cut back being more than twice that of Venezuela's cut of 50,000 barrels a day. Venexuela pumps 2.5 million barrels per day. Nigeria, which pumps 3.8 million barrels daily will cut down 120,000 barrels.

A statement from the Venezuelan oil ministry said the cuts would come in to effect from Monday.

Analysts say the threat of production intervention by OPEC has been responsible for slowing the decline in oil prices.