West Texas Intermediate (WTI) oil for December delivery on the New York Mercantile Exchange closed at a 16-month low of $66.75 on 22 October, but gained just over $1 to trade at $67.94 in late morning trading on 23 October.

The price of WTI oil has slumped by more than half since hitting an all-time record of $147.27 set on 11 July.

After deciding to bring forward its emergency meeting from 18 November to 24 October in reaction to the global economic downturn, analysts now expect Opec members to opt for phased cuts totalling between 1 million barrels-a-day (b/d) and 2 million b/d.

“In terms of the actual size of the cut we would expect the bare minimum for ministers to begin with a 1 million b/d cut, with the promise of at least 500,000 b/d [more] at a later date,” predicts investment bank Barclays Capital.

Tim Evans, energy analyst with Citi Futures Perspective says a production cut is needed to rebalance the market.

“We think a 1 million b/d cut is already discounted to some extent and that it will take a more dramatic cut to add any shock value.”

Iran has pushed for a supply cut of as much as 2.5 million b/d with Algeria putting forward a 2 million b/d reduction.

Opec president Chakib Khelil said it may require more than one meeting to get the correct balance between supply and demand.

“The decision should not leave the producer countries in the situation where they will be joining the group of countries which are already suffering from the financial crisis,” he said in Vienna on 23 October.