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Oil below $64 as Opec meets

Oil fell below $64 a barrel on Friday, to new 16-month lows, as gloom about a global economic downturn took the steam out of an Organisation of the Petroleum Exporting Countries (Opec) agreement to cut output by 1,5-million barrels a day (bpd).

Ministers of Opec agreed at an emergency meeting in Vienna to take 1,5-million bpd off the market.

United States light crude for December delivery was down $3,23 at $64,61 a barrel by 9.28am GMT.

London Brent crude was down $3,41 at $62.51.

”We believe this week will mark the start of a new quota reduction cycle by Opec and it will continue through 2009,” Deutsche Bank analyst Michael Lewis said in a note.

”However, we believe production cuts will not rescue the oil price,” he said. ”We target WTI [US] crude oil prices hitting $50 a barrel next year.”

Oil has plunged more than 50% from its record high above $147 in July, as demand has dropped in the US, the world’s biggest energy consumer and other industrial countries. — Reuters

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