The oil price rebounded this morning after Opec announced a surprise cut in production in an attempt to halt the recent decline in the cost of a barrel of crude.

Having fallen by almost 30% in the last two months to the fringes of the symbolic $100 mark, US crude jumped by over a dollar to $103.30 this morning.

Brent Crude, which yesterday slipped as low as $99.34, rebounded to $100.63 a barrel after Opec claimed it was reining in production because the world is now oversupplied with oil.

The unexpected cut in production was announced early this morning after Opec members met in Vienna. The cartel said that its members would abandon production increases that were announced this summer - when the oil price had soared to nearly $150 a barrel - and would stick to their previous quota limits.

Assuming all its members agree, this would reduce Opec's oil output by 520,000 barrels per day, to 28.8m barrels, according to Opec president and Algerian energy minister Chakib Khelil.

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