VIENNA, Austria --- After an emergency meeting in Vienna, OPEC announced plans to cut production by 1.5 million barrels a day in an effort to buoy crude oil prices, the Los Angeles Times reported. The price of light, sweet crude has plunged by more than 50 percent since oil's record high above $147 a barrel in July.
But OPEC's plans have thus far failed to reverse the trend. On Friday, crude oil for December delivery dropped $3.69 to a 16-month low of $64.15 a barrel. Analysts said that worries about a deepening global economic slump have trumped all other factors.
"On a day when the Dow was off this much, this lack of a reaction to OPEC does not surprise me," James DiGeorgia, editor of investment newsletter Gold and Energy Adviser, told the Times on Friday. "Virtually, all of the speculators have either sold out this market or they are betting their shirts on the downside trend."
But some analysts believe OPEC missed an opportunity by how they framed the production cut.
"They could have said that they were concerned about a global recession and that they would make sure there would be enough cheap oil available to help spur an economic resurgence and rally the stock market," Phil Flynn, senior market analyst for Alaron Trading Corp., told the L.A. Times. "Instead, they shot themselves in the foot. All they did was add to the panic."
On Friday, the Dow Jones industrial average nosedived more than 500 points before recovering a little to end the day with a loss of 312.30 points, or 3.6 percent, to 8,378.95.