OPEC members have agreed to cut 4 percent from their targeted oil output, or 1 million barrels a day, in the hope of shoring up crude prices at a time of weakening demand stemming from economic weakness in importing countries and seasonal factors. CBS News Correspondent Lee Cowan reports the production cutback could raise oil prices by at as much as two dollars a barrel.
Some estimates go even higher.
New York Democratic Senator Chuck Schumer says OPEC has made a strategic mistake. If the world economy, which is lead by our American economy, turns down - then people are going to buy less oil. The cut, which was at the upper end of most analysts' expectations, is aimed at keeping prices from falling further in the face of a seasonal dip in purchases and an overall decline in global economic growth. It will take effect April 1, the Organization of Petroleum Exporting Countries said. The cartel's members pump almost 40 percent of the world's oil, and their decision will affect retail prices for gasoline and other refined products in importing countries such as the United States.