VIENNA, Austria (AP) -- OPEC said Wednesday it would trim overall output by more than 500,000 barrels of oil a day by adhering closer to production quotas -- a compromise meant to avoid a backlash from the biggest petroleum consuming nations and stop the rapid decline in oil prices.
Oil prices, at least early on, held steady after extended declines.
Also coming out of the meeting in Vienna was a new agreement between Russia and OPEC intended to improve bilateral cooperation in energy issues.
Russia produces around 11 percent of the world's oil and OPEC 40 percent.
OPEC Secretary General Abdalla Salem El-Badri, who spoke of the memorandum of understanding after meeting with Russian Vice Premier Igor Sechin, said Russia and OPEC were in early talks.
"I don't think our cooperation will affect the consumer at all," El Badri said, adding that OPEC had similar arrangements with China and the EU.
Cornelia Meyer, who has helped negotiate several energy deals between Russia and Western companies said that "it's important that Russia and OPEC speak but the understandings are very loose."
"Russia does not want to be in OPEC because it means adhering to quotas which is not what Russia wants. Russia does not want to comply with anyone's wishes but the Kremlin's," she said.
OPEC's decision to effectively cut output comes after prices spiked close to $150 a barrel in July, only to shed nearly 30 percent in subsequent months.
Oil prices had lost more ground Tuesday ahead of the decision, falling $3.08 to settle at $103.26 on the New York Mercantile Exchange, the lowest settlement price since April 1.
Light, sweet crude for October delivery rose 59 cents to $103.85 a barrel on Nymex Wednesday.
A statement issued by the Organization of Petroleum Exporting Countries issued after oil ministers ended their meeting early Wednesday said the organization agreed to produce 28.8 million barrels a day. OPEC President Chakib Khelil said that quota in effect meant that member countries had agreed to cut back 520,000 barrels a day in production over the established quota.
Saudi Arabia alone exceeds that amount of production in excess of its official quota. All members of the 13-nation OPEC have such formal production limits allotted to them except violence-torn Iraq. But Khelil said that the cutbacks in overproduction would apply proportionally to all OPEC members bound by quotas.
OPEC overall regularly churns out oil above the organization's overall quota, last set in November at 27.3 million barrels a day, and it remained unclear whether group members would abide by the decision to keep to their limits.
Still, the decision could have the psychological effect of steadying eroding prices at or above the $100 mark -- the red line for many OPEC nations concerned about their rapid loss of revenue in recent months.
While the new production limit of 28.8 million barrels a day is above that set in November, the statement said it reflected adjustments to include new members Angola and Ecuador and exclude Iraq, as well as Indonesia, which used the Vienna meeting to announce it was suspending its full membership.
Saudi Arabia was widely believed to be leaning toward maintaining the status quo heading into this week's meeting -- a view shared by its Arab Gulf neighbors. Wednesday's compromise, while promising to tighten up global supplies, does not amount to an official cutback by the cartel.
"At the end of the day, all they're saying is: 'we've been cheating for the past year,'" said analyst and trader Stephen Schork, who was monitoring the meeting in Vienna. "I wouldn't say the Saudis backed down. I'd say it was a respectful nod to the other members of the group."
Saudi Arabia and others opposed to a major pullback are concerned that high oil prices will kill demand -- a trend that has already begun in the U.S. and other big oil-consuming nations. But at the same time, OPEC countries' economies are being buoyed considerably by crude's historically high price and members are not eager for the flow of money to ease.
Saudi Arabia and other U.S. allies in the Middle East also do not want OPEC to become more of a target for American consumers fuming over historically high fuel prices in a highly charged presidential election season.
The impact of Wednesday's compromise remains to be seen.
The half a million barrels OPEC said it will shave from the market is similar to the amount of additional crude Saudi Arabia unilaterally promised to pour onto the market over the summer when prices were setting new weekly, if not daily, highs.
But analysts said several factors could stem any further slide in prices over the next few months.
"There are good reasons ahead for prices to turn toward the upside," said Johannes Benigni, managing director of JBC Energy in Vienna. "Take the next hurricane," he said, alluding to the chances that -- after a few near misses in recent weeks -- further storms could savage oil installations in the Gulf of Mexico.
He also warned against expectations that non-OPEC suppliers could make up for any added demand for crude in the traditionally high-use Western Hemisphere winter season, saying "OPEC will have to step in to fill the gap" if other suppliers come up short.
Others said that OPEC's concerns were well founded.
Meyer said she expected OPEC to "wait and see what is happening to the global economy and depending on whether China and India are (also) affected, we will see them do a cut" in December.
Oil demand from China's and India's booming economies have helped fuel oil demand and drive up prices.
At the next OPEC meeting Dec. 17, in Oran, Algeria, the organization would "reassess the market situation," he added.
Since crude surged to a record $147.27 a barrel on July 11, it has tumbled by over $40, or more than 27 percent. Still, prices remain close to 14 percent higher this year than in 2007, and a barrel of benchmark crude still fetches four times what it did five years ago.
Associated Press writers Pablo Gorondi in Vienna, Austria, and Adam Schreck in Dubai, United Arab Emirates, contributed to this report.