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OPEC reaches shaky agreement to cut oil output

OPEC agreed on Saturday to reduce its daily oil production by a little more than a million barrels, to 22.9-million barrels, a move intended to stop the fall in crude oil prices.

However, a dispute between Iran and Saudi Arabia, the largest oil producer in the Organization of Petroleum Exporting Countries, casts grave doubts on the agreement's strength.

Analysts say these differences almost certainly will lead to an oil price drop this week of $1 to $2 a barrel. Crude oil closed Friday at $19.46 a barrel on the New York Mercantile Exchange, down 22 cents.

OPEC said it would reduce its production to 22.9-million barrels a day from 24.2-million. The reduced figure is considered too high in view of weak demand because of the mild winter and the recession in industrialized countries.

Iran favors a much lower ceiling of production of 22.5-million barrels a day. But Saudi Arabia insists it wants OPEC's overall ceiling to be closer to 23-million barrels a day.