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OPEC set to meet regularly as world recession looms

VIENNA - OPEC could meet regularly over the coming months to announce further cuts in oil output as a worldwide recession weighs on energy demand and crude prices, analysts said.

The Organization of Petroleum Exporting Countries decided at an emergency meeting in Vienna on Friday to slash its official oil output quota by 1.5 million barrels a day from November 1.

OPEC said its decision would be reviewed at its next meeting in Oran, Algeria, on December 17.

However following the Vienna gathering, DnB NOR Markets analyst Torbjorn Kjus said the cartel "probably needs to meet also in November... to initiate further cuts to support prices."

OPEC, which produces 40 percent of world crude, announced a cut to production on Friday in a bid to support oil prices which according to the cartel "have witnessed a dramatic collapse -- unprecedented in speed and magnitude."

Yet after the organization agreed to reduce official output to 27.3 million barrels per day, the price of Brent North Sea crude sank to 61 dollars, the lowest point for 17 months, as recession looms around the globe.

Crude futures in London and New York have plunged close to 60 percent from record highs of above 147 dollars a barrel reached only three months ago when supply concerns sent prices soaring.

OPEC said in its statement published alongside its output decision that "the financial crisis is already having a noticeable impact on the world economy, dampening the demand for energy, in general, and oil in particular."

"Moreover, forecasts indicate that the fall in demand will deepen, despite the approach of winter in the northern hemisphere."

Humphrey Harrison, managing director of energy consultants Horizon Strategies said the market can expect more OPEC meetings on output policy over the next few months.

"We're in wholly unchartered territory right now" regarding the financial crisis, Harrison told AFP. "We're probably going to see many OPEC meetings for a while," added the oil analyst.

Friday's meeting was called to officially discuss the impact of the global financial crisis and looming recession on the oil market. It had originally been planned for November 18 but was brought forward as prices plunged.

Analysts said crude futures could rebound in the long term, irrespective of further cuts in OPEC output.

"Recession fears and uncertainty continue to haunt global markets, while tight credit conditions threaten new energy projects all over the world, which could cause a price spike in the longer run," said Nimit Khamar, an oil analyst at the brokerage firm Sucden.

Ahead of OPEC's meeting in December, the cartel said on Friday that it "cannot be expected to bear alone the burden of restoring equilibrium" between oil supply and demand.

The organization used its statement to call on "non-OPEC producers/exporters to contribute to efforts to restore prices to reasonable levels and eliminate harmful and unnecessary fluctuations."