A 530,000-barrels-a-day cut in oil production has been announced by OPEC as prices slid to their lowest levels since April.

The new quota of 28.8m barrels a day is seen as a bid to try and prevent prices from falling too far so as to avoid further turmoil in the markets.

OPEC nations have around two-thirds of the world's known oil reserves, and account for 40% of the world's oil production.

Oil prices have fallen nearly 30% from the $147 high seen in July as projections of slower global economic growth have dampened demand.

Last month the International Energy Agency forecast that OECD oil demand would contract to 48.6 million barrels per day this year and then fall to 48 million in 2009.

As long as there is no shock in the supply of oil, the fall could result in a further drop in the cost of petrol for UK motorists. The AA said it takes around four to six weeks for oil price changes to filter through to forecourt pumps.

Average petrol prices on UK forecourts are already down to 112.7p from July's peak of 119.7p - a drop of nearly 6%. Average diesel prices have fallen from 133.3p to 124.1p, just under 7%.

October Brent crude fell by $4.14 to $99.30 a barrel on Tuesday on London's ICE commodities exchange, slipping below $100 for the first time since the beginning of April.

Light, sweet crude traded on New York Mercantile Exchange - the world's benchmark crude price - also dropped to a level not seen since April, falling by more than $3 a barrel to settle at $103.26.

Saudi Arabia, which accounts for around a third of OPEC output, signalled before the OPEC meeting that it was happy with the current oil situation.

Oil minister Ali Naimi told reporters in Vienna: "The market is fairly well balanced. I think things are in balance, in a healthy position."

But Iran's oil chief, Gholam Hossein Nozari, suggested otherwise after telling the media: "We believe the market is oversupplied."

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