OPEC set to announce output cut

OPEC today was preparing an agreement to curtail supply for the third time this year in a bid to lift oil prices back towards…

OPEC today was preparing an agreement to curtail supply for the third time this year in a bid to lift oil prices back towards its $25-a-barrel target.

OPEC delegates said cartel secretary-general Ali Rodriguez was drafting a deal that would remove another million barrels a day from production limits from September 1st.

Ministers are planning to ratify the pact by telephone today with an announcement likely from the group's Vienna headquarters within the day.

The group has abandoned plans to hold an emergency meeting because ministers could not find a convenient date.

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"It's likely to be announced later today", said an OPEC source.

"It's a million, that is what the number will be", said a senior OPEC delegate."We will also emphasise strongly the need for adherence to the official quotas", he added.

Ministers have been in consultation over a new deal for the past week after prices slumped close to the bottom of their preferred $22-$28 range for a basket of OPEC crudes. The OPEC basket was valued yesterday at $23.46 a barrel.

The restraints will reduce output for 10 OPEC members by four per cent to 23.2 million barrels daily, the group's lowest since April of 1999 when tight curbs sent prices spiralling to a $35-a-barrel high.

OPEC earlier this year already had cut output by 2.5 million barrels a day in an effort at scaling back a build in stocks held among industrialised nations. In total it will have slashed supplies this year by 3.5 million bpd, or 13 per cent.

Iraq, bound by United Nations sanctions, will continue to pump at will under the UN's oil-for-food exchange.