Oil prices rebound after OPEC output cut

SINGAPORE, Sept 10 (AFP) World oil prices rebounded in Asian trade today, after the OPEC oil group announced it had agreed to cut real output by 520,000 barrels a day, dealers said. brIn afternoon trade, New York's main contract, light sweet crude for October delivery, was up 1.41 cents to 104.67 dollars a barrel while Brent North Sea crude rose 1.06 cents to 101.40. brTony Nunan, manager for energy risk at Mitsubishi Corp in Tokyo, said OPEC's move reminded him of the US government's federal takeover of ailing mortgage giants Fannie Mae and Freddie Mac, which sparked a rally in global stock markets. brThe decision by the Organisation of Petroleum Exporting Countries (OPEC) is a necessary move to keep the market from collapsing, he told AFP. brBut that doesn't mean that it's going to send the market back up very fast. I think it will take more time before the market can really rally from here. brNew York crude had plunged 3.08 dollars in closing US trades Tuesday, while Brent sank below 100 dollars for the first time in five months before settling at 100.34 dollars but still down 3.10 dollars. brOPEC President and Algerian Energy Minister Chakib Khelil said in Vienna on Wednesday that the group's 13 members had agreed to begin reducing production immediately. brIf you do your own calculations, it is a cut of 520,000 barrels per day, he said, announcing a new OPEC output quota of 28.8 million barrels per day excluding Indonesia-which officially left OPEC Wednesday-and Iraq. brAn OPEC spokesman said the group's members had agreed to strictly comply with the quota target. brSince the market is oversupplied the conference agreed to abide by September 2007 production allocations totalling 28.8 million barrels per day, levels with which member countries committed to strictly comply, said the spokesman, reading a statement from the organisation. brOPEC ministers held late-night talks Tuesday to Wednesday before coming to their decision. brOil prices peaked above 147 dollars in July this year, but have fallen rapidly since then as a global economic slowdown reduces demand for crude and the US currency appreciates. brNunan described OPEC's action as a defensive move that the market thought was necessary to keep oil prices from collapsing. brBut he added that the market was expected to take a wait- and-see approach because the bigger concern remains the slowing global economy, which has dented energy demand.