The oil market has given a lukewarm response to OPEC's weekend decision to cut crude supplies for the second time this year.

The one-million-barrel a day cut means the cartel has trimmed 2.5 million barrels a day, over 9 per cent, from production since the beginning of 2001 to bolster prices amid a seasonal dip in demand and a world economic slowdown. North Sea benchmark Brent Blend crude eased 16 cents a barrel to $24.89, well below Friday's peak of $25.90, while US light crude fell 34 cents to $26.40.

Traders said bearish short-term supply-demand fundamentals and fall-out from the downturn on world stock markets had offset the impact of the restraints, which came at the top end of dealers' expectations. "The market still has more crude than it needs right now," said Mr Glen Murray of oil brokers Azur in France.

"Oil is playing second fiddle to the rest of the financial markets and there's no doubt that's tending to undermine oil prices," said Mr Peter Gignoux of brokers Schroder Salomon Smith Barney.

OPEC heavweight Saudi Arabia wasted no time in informing its customers it would implement the cuts almost immediately. The world's biggest oil producer told major oil firms their crude supply volumes would be cut by an extra 6.5 per cent from March supplies, industry sources said.

OPEC hopes to halt a slide in prices which has wiped almost 30 per cent from crude values since a rally to 10-year peaks above $35 in 2000. OPEC ministers want to counter a second-quarter downturn in consumption at the end of the northern hemisphere winter. They also are anxious that main growth markets in Asia have been hurt by the side-effects of economic slowdown in the US.

The cartel wants to keep oil in a range of $22 to $28 a barrel for a reference basket of seven crudes, with a preferred target of $25. The basket, valued at $2 discount to Brent, stood at $23.09 on Friday.

From April 1st, OPEC's output ceiling will be 24.2 million barrels per day for 10 members, excluding Iraq, whose exports are monitored under UN sanctions in place since Baghdad's invasion of Kuwait in 1990.

Non-OPEC suppliers Mexico, Angola, Oman and Russia, which attended OPEC's weekend meeting as observers, said they would help the cartel support prices.