"Our decision was straightforward," Saudi Oil Minister Ali al-Naimi said after an emergency OPEC meeting in Vienna, according to Reuters. "OPEC will do whatever is necessary to balance oil markets."
But the move wasn't enough to halt oil prices' fall. On Friday, it was trading at just above $63 per barrel, a nearly 60 percent drop from a July high of $147.27.
Analysts said that the production cut was not enough to counteract traders' worries about falling oil demand as the world perches on the brink of recession.
"OPEC has offered the market all the ammunition they had," Robert Laughlin, a senior broker at MF Global Ltd. in London, told Bloomberg news. "With the bearish economic outlook and manufacturing in freefall, this accord is not good enough."
The price drop comes months after oil prices soared to record levels, leaving consumers and businesses facing sky-high fuel costs. At that time, analysts attributed the price spike in part on supply concerns and the weakness of the U.S. dollar compared to other currencies.
"As we see global equity markets continue to plunge and see the U.S. dollar continue to rise against the euro, these items easily overshadow the impact of this production cut from OPEC," Jim Ritterbusch, president of Galena, Ill.-based energy trading adviser Ritterbusch & Associates, told the Wall Street Journal.
A spokeswoman for the U.S. Department of Energy said that the production cuts would only further harm the world economy.
"We need more supply in the market, not less," she told the Wall Street Journal.
But OPEC said that the market has been oversupplied "for some time" as demand has slowed in recent months.
Before the meeting, OPEC nations had agreed about the need for production cuts but differed on the amount necessary, according to Reuters.
Countries such as Saudi Arabia, which have relatively low price requirements, had favored a relatively small cut of about 1 million barrels per day.
But countries such as Venezuela and Iran, which rely on higher prices to fund their government programs, had wanted to cut production by as much as 2 million barrels per day.
The two sides met in the middle, negotiators said.