The OPEC oil group announced a cut of 520,000 barrels per day (bpd) to its output on Wednesday, citing downside risks to the oil market as prices fell below 100 dollars for the first time since April.
After a marathon meeting that finished at about 3:00 am local time (0100 GMT), late even by OPEC standards, the president of the organisation said its members had agreed to begin reducing production immediately.
"If you do your own calculations, it is a cut of 520,000 barrels per day," said OPEC president and Algerian Energy Minister Chakib Khelil, announcing a new OPEC output quota of 28.8 million barrels per day excluding Indonesia -- which officially left OPEC Wednesday -- and Iraq.
The cut, which immediately boosted sliding oil prices, was likely to dismay consumers hoping for bigger falls. US Energy Secretary Samuel Bodman had asked for producers to keep oil markets well supplied on Tuesday.
"The United States can order its companies (around) but not OPEC," said OPEC Secretary General Abdullah al-Badri in response to a question about possible concerns in Washington about the announcement.
Oil sank below 100 dollars for the first time in five months in London Tuesday when Brent North Sea crude for delivery in October dropped to 99.04 dollars in late European trade.
But prices rebounded in Asian trade. New York's main contract, light sweet crude for October delivery rose by 92 cents to 104.18 dollars a barrel while Brent North Sea crude rose 65 cents to 101.07.
Analysts had suggested OPEC would keep its official policy unchanged but would discreetly agree to rein in production by cracking down on output by some members, mainly Saudi Arabia, who are pumping above their quota.
The candor of the final announcement was a surprise.
Khelil said he did not expect the OPEC decision to reverse the downward trend of oil prices, which peaked at 147 dollars a barrel in July.
"My hunch is probably the price still will be going down despite the decision that we made," he said.
"I don't think this will affect the consumers in any way because first of all, there's an oversupply. Everybody agrees on that."
The stakes for OPEC were entirely different from the last time the group met formally in March when prices had broken through 100 dollars and were on a steep upwards trajectory.
The gathering this time led to questions about what price level the cartel wanted to protect as the market came down.
Iran, Iraq and Venezuela have identified 100 dollars as their minimum level for oil, while analysts see Saudi Arabia as being comfortable with a figure around 80 or 90 dollars.
Explaining its decision on Wednesday, OPEC identified a shift in sentiment in the oil market linked to falling economic growth, a strengthening dollar, easing geopolitical tensions and greater supply.
"All the foregoing indicates a shift in market sentiment causing downside risks to the global oil market outlook," it said.
Economic conditions, which determine demand for oil, have worsened considerably in recent months. Many European economies face recession, the United States is struggling and fears are growing about the emerging economies of Asia.
OPEC also announced that Indonesia had formalised its departure from the group after it became a net importer of crude.
"The conference regretfully accepted the wish of Indonesia to suspend its full membership in the organisation," OPEC said in a statement.
Elsewhere, Russian Vice Premier Igor Sechin reached out to OPEC late Tuesday, calling for greater cooperation between the cartel and his country, the world's biggest non-OPEC oil producer.
"Cooperation with OPEC is one of the priorities of Russia," he said, according to a statement read out at the opening of a meeting of OPEC's 13 members here.
In production terms, the departure of Indonesia was more than compensated for by the arrival of Angola, which produces 1.85 million barrels a day; and Ecuador, which produces 500,000.
A statement from the group said Angola would hold the OPEC presidency for a year from beginning of 2009.
The departure and arrivals brings OPEC's membership to 12 nations. Their next meeting will be in Oran, Algeria, on December 17.