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Kathryn Glass – (FOXBusiness)

Oil prices continued their steep losses despite an announcement by the OPEC cartel that the producers will cut production by 1.5 million barrels a day next month.

Friday, crude oil closed at its lowest level since May 31, 2007, settling at $64.14 a barrel, down 5.4 % or $3.69.

The oil producing nations called an emergency meeting in Vienna, Austria, on Friday and voted to slash production in an effort to stop oil prices from plummeting further.

There was some speculation that the meeting could last several hours, with cartel members such as Iran pushing for cuts as high as 2 million barrels per day, however, it took less than two hours for producers to agree to cut 1.5 million barrels per day in November.

“Oil prices have witnessed a dramatic collapse — unprecedented in speed and magnitude,” said a statement released by the cartel.

Following the announcement of the production cuts, OPEC President Khelil was asked if a decrease in oil production would negatively impact the global economy. Khelil spoke adamantly against the assumption.

“Oil is not responsible for the market turmoil, it is the mismanagement of economies,” he said.

Khelil went on to assert that the price of oil by itself does not have an impact on the global economy. He said it actually supports economic growth and the high prices in July were motivated by speculation; they had nothing to do with supply and demand. Khelil said he suspects speculation is what is driving the U.S. dollar higher now.

The recent plunge in oil prices on fear of a global economic slowdown appeared to trump any efforts to decrease production. The commodity continued to trade lower, dropping as low as $62.65 Friday morning.

“Looking at the crude oil—it was following the Dow tick for tick,” said FOX Business contributor Phil Flynn of Alaron Trading. “Oil is totally focused on the health of the stock market right now. If the stock market does well, oil could rebound and it could rebound in a big way, regardless of what OPEC does…if the stock market looks ugly, oil, at least for the short-term, is going to look pretty bad.”

John Kloza, chief oil analyst for the Oil Price Information Service doesn’t think any action by OPEC will impact the market much.

“I don’t think that OPEC could have done much to stem the slide in 2008,” Kloza said. “This is tied to worries about a global recession and those will persist through new year, no matter what.”

Kloza thinks crude prices could fall near the mid-$50 per barrel range if the price drops below $62 per barrel early next week.

“It’s kind of like the Dow breaking 10,000—if the price of crude doesn’t stabilize as it approaches $62, you’re going to get a much larger drop,” Kloza said.

Coming into the day, crude was off its July high of $145.29 by 53%, after gaining $1.09 per barrel on Thursday, closing at $67.84.

OPEC will meet again in December, and could push for more production cuts if oil prices do not stabilize by then. The next meeting will be held in Algeria.

Natural gas fell 5.3% on Thursday to $6.419, and continued that fall on Friday, with prices falling an additional 18 cents to $6.239, the lowest settlement since September 21, 2007. RBOB Gasoline fell 6.3% or 9.99 cents on Friday to settle at $1.4779 per gallon, the lowest level since January 2007. Heating oil prices dropped 4.1 % or 8.32 cents to $1.9465 a gallon; August 2007, was the last month when the fuel closed below $2.00 per gallon.

OPEC Cuts Oil Production in Move to Boost Prices

(FOX)

Take that, OPEC.

The international oil cartel agreed Friday to cut daily production by 1.5 million barrels in a move to drive up prices on the international market — and, at the gas pump.

But, crude oil futures went in the other direction, falling 5 percent Friday in London trading on speculation that demand will continue to fall.

Oil fell sharply in morning trading on the New York Mercantile Exchange, with light sweet crude priced for December delivery at $64.40.

Hardline OPEC members Iran and Venezuela had been pushing members to slice production by 2 million barrels a day, with Iran’s oil minister declaring, “The era of cheap oil is finished.” When asked before Friday’s meeting what price Iran would want for its oil, Gholam Hossein Nozari boasted, “The more the better.”

OPEC, meanwhile, cited lower demand and market surpluses as reason for reducing output.

“The financial crisis is already having a noticeable impact on the world economy, dampening the demand for energy…and oil in particular,” OPEC said in a press release after the decision was announced. “This slowdown in oil demand is serving to exacerbate the situation in a market which has been oversupplied with crude for some time.”

It also noted that the collapse in oil prices — which have fallen over 55 percent since their mid-July peaks — may jeopardize oil projects and threaten supply growth in the medium term.

Iran is a traditional OPEC hardliner on prices and production and is the second largest producer within the organization. Saudi Arabia leads OPEC production, and was expected to lobby ministers for a smaller cut than proposed by Iran and Venezuela.

Iran has taken a liking to astronomical oil prices, using its newfound wealth to fuel its nuclear program in defiance of the U.S. and the global community.

Sam Gault, president of Gault Inc., a fifth-generation, family-owned oil business in Westport, Conn., said the Saudis still control OPEC’s actions.

“Its really going to come down to whether Saudi Arabia wants to cut production, because they’re the ones that can afford to cut production,” Gault told FOXNews.com. “A lot of times the different members of OPEC wind up cheating on their quotas.”

Analysts at JBC Energy in Vienna, Austria, said that the oil cartel is likely to request non-OPEC producers, including Russia, to cooperate with them “in order to hinder the price slide.”

“Behind the scenes negotiations (with Russia) are going on and a well-publicized joint cut is still possible,” the analysts wrote in a report Thursday.

Over the last four weeks, gasoline demand fell 4.3 percent from the same period last year,a ccording to industry analysts. Distillate fuel demand was down 5.8 percent, and jet fuel demand was down 9.2 percent.