Oil cut could hit petrol prices

Oil producing countries were expected to agree a deal slashing output from today, increasing pressure on fuel prices.

Members of Opec were meeting in Cairo where they are due to approve a decision to cut output by 1.5 million barrels a day.

Oil has tumbled on commodity markets due to lower demand after the September 11 attacks and a build-up of capacity among the world’s major suppliers.

Talks about a cut in production gathered pace last month and Opec members said they would move only if non-Opec countries followed suit.

Non-Opec countries such as Russia, Norway and Mexico have agreed to slash output by a total of just over 460,000 barrels a day.

The cuts are likely to take effect from January 1 and could last six months but analysts said the rally in the oil price may be short-lived.

Opec - Organisation of the Petroleum Exporting Countries - members control around 40% of the world’s oil supply.