Yusgiantoro, who will take over as OPEC president on Jan. 1, said the cuts were due to concerns over falling prices next year and a potential oversupply.

"OPEC sees incoming oil oversupply of 1.4 million barrels per day in the world market, which brings concerns of falling oil prices."

"If there will be 1.4 million barrels of oversupply next year and we have decided to cut 900,000 barrels of production this year then we hope non-OPEC countries will cut some 500,000 barrels per day," said Yusgiantoro.

However, the world's third largest exporter Norway, has said that it sees no need for cuts as Iraq is still struggling to get its production off the ground and many western countries have depleted stocks after the holiday period

OPEC oil ministers will next meet on Dec. 4 in Vienna to set policy for the first quarter of 2004.