In late-afternoon trade, New York’s main futures contract, light sweet crude for delivery in January, was 78 cents higher at 40.84 dollars a barrel, off its earlier low of 39.19 dollars a barrel.

The contract closed at 40.06 dollars on Wednesday at the New York Mercantile Exchange, a decline of 3.54 dollars.

Brent crude oil for February delivery was 29 cents higher at 45.82 dollars a barrel, off a low of 45.35, after falling 1.12 dollars to close at 45.53 Wednesday in London.

The Organisation of the Petroleum Exporting Countries (OPEC), which produces about 40 percent of the world’s crude, approved a record output cut Wednesday of 2.2 million barrels a day, about 7.0 percent of its output quota.

Ministers of the 13-member cartel, meeting in Oran, Algeria, agreed to the reduction in a bid to shore up prices, which have slumped from record highs above 147 dollars in July due to falling demand in a slowing global economy.

It was the third time in three months that OPEC has lowered production, and the largest reduction since the cartel introduced production quotas in 1982.

Before the latest cuts, OPEC’s official daily output target was 27.3 million barrels a day but analysts said the cartel was producing slightly more than that as some members tried to boost income.

Analysts questioned whether the latest reduction would be sufficient against rapidly falling demand with some of the world’s leading industrialised oil consumers—the United States, Germany and Japan—already in recession.

Others including China are experiencing sharp growth slowdowns.

Oil prices fell despite a record drop in the dollar Wednesday, a day after the US Federal Reserve slashed its base lending rate to virtually zero. A weak greenback tends to lift the price of dollar-priced oil for buyers using cheaper currencies.

“If a plunging dollar and a zero interest rate can’t save oil, don’t think that OPEC can. The market is bigger than the cartel and the demand destruction is something that will not be cured by trying to raise prices,” said Phil Flynn, an analyst at Alaron Trading.

Mark Pervan, senior commodities analyst at ANZ bank in Melbourne, said “there was a level of scepticism” in the market about whether OPEC nations will comply with the cuts.

He described the cartel as being “caught in a Catch 22, a lose-lose situation” where a small cut might not have the desired effect, but a large cut would cause doubt as to whether OPEC nations would comply.

Pervan also said the dependency of OPEC members on oil revenue, as well as “a history of non-compliance in large cutbacks” contributed to market scepticism.

Just before the Oran talks opened, non-OPEC members Russia, which attended the meeting, and Azerbaijan said they were ready to cut their own oil production by about 300,000 barrels a day each.

However, JPMorgan analyst Lawrence Eagles predicted that prices would probably push below 40 dollars a barrel.

“Any significant improvement in prices will have to wait until the world economy gets back on to a growth path, and works off current high stocks and the spare capacity that is being created—a task which will take some time,” he said.