Oil prices hit five-month low

The Organisation of the Petroleum Exporting Countries (OPEC) has cut its production quotas amid the sharp drop in oil prices in recent weeks, Algerian Energy Minister Chakib Khelil told reporters early on Wednesday.

Production quotas will be returned to the levels of September 2007. Excluding OPEC members Angola, Iraq and Indonesia, the new production target will be 28.8 million barrels a day, trimming about 520,000 barrels from the current daily production levels.OPEC ministers met in Vienna to discuss oil production levels.

Earlier, Iranian Oil Minister Gholam Hossein Nozari called on the fellow cartel members on Monday to limit oversupply and stick to their allocated output. Khelil, conference president, in his opening address said oil ministers should not only address production levels but the causes of price volatility seen over the last year.One barrel of crude produced by OPEC stood at $101.08 Monday, down from the record $140.73 July 3.High fuel prices and an economic slump have dampened oil consumption in the US, with demand also slowing in other industrialised countries.Earlier Tuesday, both Saudi and Venezuelan oil ministers had indicated that production levels should stay the same.OPEC produces more than 37 per cent of the world's oil supply. The organisation calculates an average basket price based on 13 brands produced by its members.