Russia to cut oil exports

MOSCOW, Russia -- Russia has bowed to international pressure and promised to cut its oil exports.

The government said Wednesday it will reduce exports by 150,000 barrels per day from January 1, 2002.

The decision follows lobbying from the Organization of Petroleum Exporting Countries (OPEC).

Dealers say the cut is the bare minimum OPEC will accept. The cartel is leading a drive to cut production in an effort to boost prices amid concerns a global economic slowdown and recession in key economies -- the United States, Japan and Germany -- would lead to a fall in demand.

Crude oil prices have dropped 20 percent this year, from a high $29.91 a barrel in February to a low of $17.68 in November, as demand has languished.

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Wednesday's announcement led to a rally in oil prices. Brent crude for January delivery rose 69 cents to $19.98 per barrel in early trading on London's International Petroleum Exchange.

OPEC wants to cut its daily maximum production, currently at 23.2 million barrels, by 1.5 million barrels -- if non-OPEC countries agree to reduce output by 500,000 barrels per day.

Norway, the third largest exporter, has offered up to cut 200,000 barrels per day and Mexico has said it will cut 100,000 barrels per day.

Last month, Russia disappointed OPEC when it offered a cut of just 50,000 barrels per day out of a production of more than seven million. Russia is the world's second biggest exporter after OPEC member Saudi Arabia.

But analyst Tim Whittaker of Lehman Brothers doubts Russia will follow through with its new pledge to make the reduce production by 150,000 barrels. "I'm utterly sceptical that there will be any cut at all from Russia. I think it will carry on as before," he told CNN.

Whittaker said Russia, where companies control output, would be the world's biggest exporter if it maintained production levels and Saudi Arabia cut, a position Moscow would relish.