Saudi oil cuts fail to "Talk up" oil prices

OPEC oil ministers have failed to 'talk up' the declining oil prices. Per barrel prices fell below $59 today as traders remained skeptical of a united move by all OPEC members to follow Saudi Arabia's in cutting back production, despite their agreement last week.

Saudi Arabia, the world's largest oil exporter has already announced that it would cut output by 380,000 barrels per day from November 1.

Oil producing nations had agreed to a collective production cut of 1.2-million barrels of oil per day from oversupplied markets. This is the first oil cut after 2004.

However, oil traders are skeptical at OPEC's lack of unity on implementing the cuts just before the talks last Friday. According to oil industry analysts the fact that oil is still three times the price level in January 2002, indicated the lack of urgency among the POEC members.

Some OPEC ministers have indicated of the cuts being increased by another 500,000 barrels in December. Others are concerned about the high stocks in consumer countries and a projected drop in demand for OPEC oil next year.