Opec ministers have agreed to cut oil output by 1.2 million barrels per day to arrest a fall in oil prices, after a meeting in the Qatari capital Doha.

Oil prices jumped in Asian trade on Friday after the decision was taken. After the announcement, a barrel of light sweet crude rose 54 cents to $59.04 on the New York Mercantile Exchange from its close earlier on Thursday at $58.50.

Some ministers said a further cut of 500,000 bpd could follow when Opec next meets in Abuja in December to address high fuel stocks in consumer countries, particularly the US.

Mohammed bin Dhaen al-Hamili, UAE oil minister, made the announcement at a news conference in Doha.

He did not specify the amount of production that each member country would cut, but said the reductions will affect all countries except Iraq. It is to take effect on November 1.

The cuts will come from actual production levels, he said, and are more than the one million barrels a day being called for earlier by cartel members.

Opec is currently producing about 29.5 million barrels of oil per day.

Prices have declined more than 25 per cent since mid-July.

Credibility

"The credibility of Opec is at stake," Chakib Khelil, Algeria's energy and mines minister, said before the meeting that began on Thursday and ended in the early hours of Friday.

After the meeting, Khelil said all 10 Opec members subject to quotas would participate in the cut.

Only Iraq, struggling to get its oil industry back on its feet after war and Western sanctions, was exempt.

"Everybody has a share," Khelil said.

Once in Doha, the group that pumps over a third of the world's oil presented a united front.

Ali Al-Naimi, Saudi Arabia's oil minister, said the world's leading exporter fully supported the plan to cut supplies and he indicated that further cuts may be made.

"This is not the end of the road," he said.

Photo Caption

Oil pump