Oil cuts may affect fuel prices

A decision on oil output cuts is expected to be announced in a bid to bolster its plunging price at the expense of falling fuel prices, the president of the Organisation of Petroleum Exporting Countries (Opec) has suggested.

Chakib Khelil, head of the 14-member cartel, said the decision would be made when the group meets on December 17, and suggested that reductions in oil output could be deeper than expected.

He said: "A consensus has formed for a significant reduction of production levels. The best way is to surprise them, and I hope it will."

Mr Khelil said the cut would be "severe", and added that an output decision that startles markets would "help bolster plunging oil rates."

He noted that the turbulent world economy has considerably reduced demand for oil, and added that Opec has called on Russia, and other non-Opec members, to help them regulate the price of oil worldwide.

Oil prices settled at a four-year low on Friday of $40.81 a barrel. Markets are expecting another cut at the December 17 summit, with some analysts predicting cuts of as much as two million barrels per day.

"The stronger the decision, the faster prices will pick up," Mr Khelil said.

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