This is Bob Doughty with the VOA Special English EconomicsReport.

Last week, the Organization of the Petroleum Exporting Countriesdecided to reduce oil production by about four percent startingApril first. Oil ministers from eleven member nations met in Vienna,Austria to approve the cut.

OPEC says low oil supplies are not the cause of current highprices. It blames oil market traders and world conditions. OPEC saysoil supplies are increasing and it must take action. Theorganization says its goal is to keep prices between twenty-two andtwenty-eight dollars a barrel.

The decision by OPEC comes at a time of record high fuel pricesin the United States. In March, oil reached thirty-eight dollars abarrel. That is the highest price since the Persian Gulf War innineteen-ninety-one.

More price increases will especially hurt the United States. Thisis because oil is traded only in dollars. Other countries exchangetheir money to buy oil in dollars. But recently, the value of thedollar has decreased against the euro and the Japanese yen. Europeand Japan can buy more dollars with their euros and yen. That meansthey can buy more oil too. This difference in the value of the euro,yen and dollar makes oil more costly for the United States.

Experts say OPEC nations will findit difficult to cut production. They point to the fact that OPECcountries already produce one-and-one-half million barrels a daymore than the agreed limit. Experts say only Saudi Arabia couldgreatly cut production. This reduction would not meet the cutsrequired by OPEC.

Also, two of the top three exporting nations, Russia and Norway,are not OPEC members. These and other nations could increase exportsto meet world needs. Still, OPEC's announcement has caused changesin the price of oil in recent days.

Oil, or petroleum, is the most actively traded product in theworld. The biggest oil trading centers are in London, New York andSingapore.

Oil is sold by the barrel. A barrel containsone-hundred-fifty-nine liters. The International Energy Agencyrecords the world's energy activity. It says oil provides aboutthirty-five percent of the world's energy. That is down fromforty-five percent in nineteen-seventy-three. But oil remains one ofthe most important goods in the world economy.

This VOA Special English Economics Report was written by MarioRitter. This is Bob Doughty.