OPEC to cut output

Gasoline prices likely to remain high

? OPEC decided Tuesday to cut its excess production of crude immediately and lower output quotas by 1 million barrels a day effective April 1 — a surprise move that could mean prices for gasoline and oil would remain high.

The Organization of Petroleum Exporting Countries expects the combined cuts would reduce actual production by about 10 percent, or 2.5 million barrels a day.

OPEC agreed to the two-stage reduction in output to try to keep oil prices stable when warmer weather erodes demand in major importing countries.

The oil group has often urged its members to comply better with their agreed quotas, but its decision to make an additional cut in its official target of 24.5 million barrels was unexpected.

“As time goes on in the second quarter, we will see a drop in demand that will affect prices. If we don’t do anything, there will be oversupply in the second quarter of about 3 million barrels (a day),” said OPEC president Purnomo Yusgiantoro.

The April cut in production would bite deeper into consumers’ wallets, said Jan Stuart of FIMAT USA, a New York brokerage.

“What this means is that consumers are going to carry on paying loads of money for their gasoline for quite some time,” he said.

Iraqi Oil Minister Ibrahim Bahr al-Uloum, third from right in front row, attends an OPEC meeting in Algiers, Algeria. OPEC announced Tuesday that it would cut excess crude production and, in a surprise move, lowered output quotas by 1 million barrels a day effective April 1.