OPEC oil producers agreed Wednesday to slash output by 1.5 million barrels per day (bpd) from February to underpin prices, sparking immediate warnings it could fuel an economic slowdown, reported AFP.
The 11-nation Organization of Petroleum Exporting Countries (OPEC) largely ignored calls, notably from the United States, to limit the scale of the output cut, said the agency.
The 1.5 million bpd cut had been widely expected, and factored into markets where crude oil has rebounded in recent days to around 25 dollars a day, after collapsing below 22 dollars last month.
But reaction was quick to the decision in Vienna.
In Brussels, the European Commission said the cut was "premature" and "threatened to have negative effects, notably on the economies of consumer countries ... but also on other countries."
Analysts also fear that the cut has come too soon, according to the agency.
"They are running into a near-recession in the United States and 25 dollars is not good for them," said Leo Drollas, an oil expert with the London-based Center for Global Energy Studies.
Oil-consuming countries had urged OPEC to show restraint, fearing that higher prices will filter through, stoking inflation, crimping corporate profits and tilting the world economy towards recession.
US Energy Secretary Bill Richardson toured OPEC countries on the eve of its latest meeting lobbying for any cut in production to be as small as possible, but his concerns apparently fell on deaf ears.
Meanwhile, UAE said Wednesday that OPEC's decision was "adequate," and would not have an impact on the world economy, according to the Gulf News daily.
"The decision by OPEC to cut its production by 1.5 million bpd is good and adequate given the excess of one to two million bpd on the market," UAE minister of petroleum and mineral resources, Obeid bin Saif Al Nasir, said in Vienna.
"The reduction will not have a big impact on prices, and as a result will not have any big effect on the world economy," he said -- Albawaba.com
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