Oil producers will try to place a floor under the plummeting oil price by imposing production cuts when they hold an emergency meeting in Vienna today.

The Organisation of Petroleum Exporting Countries (Opec), which supplies more than a third of the world’s oil, is meeting in the face of a looming global recession and a 46 per cent fall in prices from record highs hit in July.

Oil prices rose more than $2 a barrel yesterday ahead of the crucial meeting, but the rises were too little to sway analysts away from forecasts of production cuts.

Hussain al-Shahristani, Iraq’s oil minister, called for an immediate cut to balance oil supply and demand. “The demand for oil has gone down considerably over the last few months and the current production inside and outside Opec is more than the demand so obviously that would require a cut in the production,” he said.

However, the Minister was reluctant to predict how big any cut by the Opec countries might be. “We are talking about a cut that will balance the supply and demand,” he said. “We’ll have to look at the data, see what the demand is before we decide on the cuts.”

The Opec countries will also meet in December, and so it need not make drastic cuts at once, Mr al-Shahristani said. He added that Opec was concerned about prices because its budget for next year was based on oil at $90 per barrel.

Venezuela, a founding member of Opec, has also been pushing for a cut alongside Iran, which has suggested a cut of two million barrels per day. Shokri Ghanem, the head of Libya’s Opec delegation, also called for a cut of about two million barrels per day.

However, Saudi Arabia, the most influential and biggest producer, has said only that the oil price would be determined by the market, although there are signs that the country has begun to pare back production in line with expectations of lower demand.

US crude rose $2.07 to $68.82 a barrel, while London Brent crude crept up by $2.05 to $66.57.

US crude fell to its lowest level in 16 months this week and settled 7 per cent lower because of weaker demand in the United States and concerns that economies are heading into recession.

Chakib Khelil, Opec’s president, has also said that it could consider cutting back its oil output in several steps. “I think that is a solution not to be excluded,” Mr Khelil said. However, he would not rule out the possibility that the group could decide to cut back production with immediate effect.

Analysts have said that a slowing global economy could limit the impact from any oil supply cuts Opec might agree in order to support prices.

— Two of Britain’s biggest supermarkets yesterday triggered a new battle in the petrol price war by promising to cut pump prices by 3p a litre to a new low of 94.9p. J Sainsbury announced it would reduce prices to the level at most of its stores from this morning. Asda retaliated with cuts of its own, promising 94.9p nationwide on unleaded petrol and 107.9p on diesel. Asda guaranteed to hold the prices for ten days regardless of the oil price. The cuts take petrol prices to their lowest since September 2007.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive