Oil prices edged higher in electronic trading Wednesday after OPEC members said the group would cut crude-oil output by 520,000 barrels a day under a plan to roll back production to quotas set in September 2007.
The move is a bid to halt sliding prices in what OPEC described as "over-supplied" conditions on global energy markets. of the announcement.

The benchmark contract for November delivery climbed rose 35 cents to $103.71 a barrel in mid-afternoon electronic trading in Tokyo. It touched a session high of $104.73 a barrel. "The market is short oil, and this piece of fundamental news would unnerve the market," said Jonathan Barratt, managing director of Commodity Broking Service in Sydney. "It could arrest the fall in oil prices for an intermediate time."

Chakib Khelil, president of the Organization of Petroleum Exporting Countries, was cited in reports as saying the new target would cut output by 520,000 barrels a day from levels in July. Reports said the cutback would be phased in over the next 40 days.

Analysts said OPEC's decision suggests that the group, which controls 40% of global output, views world oil markets as well supplied in the face of tepid demand growth and growing worries that recessionary forces could knock back consumption in coming quarters. The announcement was also seen as a surprise after several key oil ministers, including Saudi Arabia's Ali Naimi, said in recent days that the market remained healthy, with supply and demand broadly in balance.

OPEC's post-meeting statement highlighted the downside risks to the global oil-market outlook. The statement noted that "prices have dropped significantly in recent weeks, driven by a weakening world economy, in particular in major [Organization for Economic Cooperation and Development] countries, with its concomitant lower oil-demand growth, coupled with higher crude supply, a strengthening of the U.S. dollar and an easing of geopolitical tensions."