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OPEC cuts oil production
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July 25, 2001: 1:12 p.m. ET
Oil cartel set to slash crude output by as much as 1 million barrels per day
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VIENNA (CNN) - OPEC oil ministers announced on Wednesday they will cut back crude oil production by 1 million barrels per day beginning September 1.
"Considering the impact of the slowing world economy on oil demand, and the relatively strong buildup of oil stocks, OPEC's objectives are to ensure market stability, satisfy world demand and avoid oil price volatility, in the interest of both producers and consumers," said an OPEC statement.
Several oil ministers have told CNN that the cut is intended to hold oil prices near $25 a barrel.
The oil cartel has already cut production by 2.5 million barrels a day this year. A slumping U.S. economy combined with rising petroleum stocks have cut the demand for crude oil.
The statement said the ministers also voted to hold open the option of having an "extraordinary meeting soon if the market warrants it."
Saudi Arabia is the biggest oil producer out of the 11 members that form the Organization of Petroleum Exporting Countries.
The move could affect fuel prices at the petrol pumps and further damage a fragile world economy, as it comes at a crucial time for oil refineries which build up stock ahead of the Northern Hemisphere's winter period.
OPEC ministers, from Algeria, Iraq, Kuwait, Nigeria, Qatar, Indonesia, Saudi Arabia, Iran, United Arab Emirates and Venezuela, had been in round-the-clock talks since last week as the price of crude dropped below their preferred range of $22-$28 a barrel.
Cutting 1 million barrels a day, or 4 percent of output, would reduce supply to 23.2 million barrels a day, the group's lowest since April 1999 when tight curbs sent prices spiraling to $35-a-barrel, Reuters said.
Brent crude for September delivery rose 26 cents to $25.16 a barrel on London's International Petroleum Exchange in midday trade.
Check on U.S. energy stocks
The cut is OPEC's third this year -- two previous reductions took a combined 2.5 million barrels per day out of world supplies. Oil prices have lost some $5 a barrel since peaks near $30 in mid-June.
The latest downward pressure on oil prices came about after demand in the U.S., the world's biggest consumer of crude, started to decline, leaving a build up of stocks at refineries.
OPEC members need to defend the price of crude as it represents a major source of revenue for the countries. 
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