The Organization of Petroleum Exporting Countries' decision last month to slash oil output by 1.5 million barrels a day from Nov. 1 will not immediately shore up crude prices, the cartel's chief said Sunday.
This decision "will take a long time to take hold" because the demand for oil has still not reached OPEC's revised production level, the Algerian Energy Minister and current OPEC chief Chakib Khelil told local radio.
At an emergency meeting in Vienna last month, OPEC ministers agreed to reduce output by 1.5 million barrels a day to 27.3 million bpd from Sunday in a bid to prevent prices falling further.
"A number of countries including Algeria, United Arab Emirates, Iran and Nigeria, have already announced a decrease in production," Khelil added.
Despite U.S. and U.K. criticism of the cut, Venezuelan Energy Minister Rafael Ramirez later said the cartel must shave at least another 1 million barrels from its oil supply in December or before next month.
Since the record high of more than $147 dollars reached in July, the price of a barrel of oil has more than halved.
Khelil said he expected prices to drop further if the world economy continues its decline.
"Everything depends on the global economic situation. If it continues to deteriorate, it is clear that demand for oil will drop, which is likely to further lower prices," he said.
But the Algerian minister also said that the prices could rise if the U.S. dollar weakens against other currencies.
"We can say that in the long term, in the next two to three years, the price of oil will go back up because there is a lack of investment (in drilling for more oil) and many projects have been stopped," he said.
OPEC pumps about 40% of the world's oil with an official quota of 28.8 million bpd currently.