MercoPress. South Atlantic News Agency

Meeting of the OPEC Conference.

The Organisation of Petroleum Exporting Countries oil cartel on Wednesday slashed 900,000 barrels a day from its production ceiling, signalling a new emphasis on reducing the inventories of the biggest consuming countries to keep prices above $25 a barrel.

The surprise move - which will reduce Opec's target output by 3.5 per cent, to 24.5m b/d - marks the first in what could be a series of cuts aimed at keeping inventories below their 10-year average, delegates at the group's ministerial meeting in Vienna said.

Keeping inventories low gives Opec more power to determine the oil price, said one analyst.

The cut sent oil prices soaring, even though analysts warned the cartel might not achieve all the cuts. The benchmark Brent crude futures contract jumped by $1.15, to $26.67 a barrel in London and benchmark US crude futures on the New York Mercantile Exchange leapt $1.12 to close at $28.24. US stocks were pushed lower, with the Dow Jones Industrial Average falling 1.57 per cent to close at 9,425.51.

Spencer Abraham, US energy secretary, said: "We do not comment on specific Opec meetings or decisions - but sustained global economic growth requires abundant supplies of energy. The US believes oil prices should be set by market forces in order to ensure adequate supplies."

A group of Senate Democrats last month took a more political stance when they publicly criticised Saudi Arabia for a reduction in oil exports in August that they said was responsible for driving up US petrol prices.

Analysts said the decision could undermine prospects for a global recovery and threaten Opec's relationship with the US.

Claude Mandil, head of the International Energy Agency, the West's energy watchdog, said he was "disappointed" by the Opec decision. He said: "Given the continued weakness of the world economy, Opec's strategy to maintain prices at persistently high levels cannot contribute to a sustained recovery and a return to global economic growth".

Opec fears that stocks - which usually fall during the northern winter - could grow in coming months as Iraq increases production. The output cut, which goes into effect on November 1, may lead the large consuming nations to accelerate the build-up of their emergency reserves, potentially pushing prices higher.