The announcement came at the end of two days of talks here between energy minister of OPEC members Algeria, Iran, Saudi Arabia and Venezuela, and the head of the Pemex Oil Company in Mexico, which is not part of OPEC, on ways to limit production to shore up flagging world oil prices.

In London the price of North Sea Brent crude shot up to 13 dollars a barrel minutes after the announcement. Nuaimi and Pemex president Adrian Lajous announced the results of the accord, but did not say how the cuts would be spread out between the five countries.

Saudi Arabia had called the emergency talks in the Netherlands in an attempt to forge consensus over new cuts in oil production before the next OPEC meeting in Vienna on march 23.

The core decision for the cuts had been made Wednesday, when Saudi Arabia,Kuwait and Qatar -- all OPEC members -- and non-OPEC country Oman agreed on the need for cuts to eliminate excessive stockpiles of oil around the world. Saudi Arabia said before the Hague meeting that it would also seek to bring Iran (an OPEC member) and Norway (a non-member) into the initiative.

THE oil market cheered last week the latest effort by major oil producers to drain a world oil glut. Crude futures for April delivery broke through $15.00 a barrel on Friday for the first time in five months after top oil producers meeting in the Hague in the Netherlands announced a deal to cut production by more than two million barrels per day (bpd), about 3 per cent of the daily world output.

But officials held back important details, such as how much each country would cut, and crude futures quickly forfeited most of their early advances. April futures ended last Friday's session at $14.49 a barrel, up 18 cents, after hitting a high of $15.11.

Meanwhile, major oil companies' shares, which had followed oilprices sharply higher in recent days, were mixed. The Standard & Poor's Oil and Gas Index, which tracks oil prices most closely, rose 0.69 to 49.30, while the broader S&P 500 share index fell about 3.09 points to 1,294.59.

The major international integrated oil companies index, which includes concerns like Exxon Corp, dropped about 5.09 points to 867.35. "When you look at the major oil companies, more than half are down today," said Frank Knuettel of Paine Webber. "There was obviously some disconnect between oil prices and oil stocks, and that's because investors are extraordinarily skeptical -- not only with this agreement, but with OPEC historically."Almost exactly a year ago, Saudi Arabia and Venezuela, heavyweight members of the Organization of Petroleum Exporting Countries, teamed with non-OPEC producer Mexico for talks in Riyadh, Saudi Arabia, which ultimately led to two agreements to cut worldwide supply by a total of 3.1 million bpd.The talks rescued oil prices, sending oil futures from below $13 toalmost $17 a barrel, but only temporarily. By December, prices hit a 12-year low of $10.35 as cheating on the agreements and a sharp rise in exports from Iraq left the market awash in oil.