The Organisation of Petroleum Exporting Countries at a meeting in Oran, Algeria December 17 agreed to reduce production by 2.2 million barrels a day from the first of the year.

'Less than a month has passed since Opec took this decision,' Opec Secretary General Abdalla Salem El-Badri said in an interview with Opec's monthly bulletin.

'And so I would say it is still too early to write off the possible effect that this could have on the oil market.'

He recalled that the December decision brought the total reduction in Opec output since early September to 4.2 million barrels a day.

'All in all, we will not know the full effect of the latest 2.2-million-barrel-a-day reduction, and the degree to which member countries have adhered to it, until February 15.' But he added: 'From the data we have been receiving, there has been an almost 100 per cent compliance with the first two cuts, and this is a good sign.'

He said that after February 15 the Opec secretariat would review the market and present its findings to an Opec conference in March.

'If then the market is still over-supplied, the conference will not hesitate to take further measures to balance the market.' Mr Badri added that non-Opec producers such as Russia, Norway and Mexico could 'contribute by cutting supply to ensure that the market is not over-supplied ... because if it is, then it will be in no one's interest'.

Opec has been struggling to firm up crude prices, which have plunged since hitting a record high of US$147.50 (S$219.73) a barrel in mid-July.

In the face of crumbling demand in recession-strapped consuming nations, prices are currently in a range of US$38 to about US$44 a barrel. -- AFP