Oil-producing nations are slashing production to try to halt recent price falls.

Opec members meeting in Vienna decided to cut output by 1.5 million barrels a day from next month in an attempt to shore up sagging prices.

Explaining the reasons for the move, Opec issued a statement saying prices had witnessed a dramatic collapse unprecedented in speed and magnitude.

Crude oil has tumbled to less than $70 a barrel amid global recession fears - less than half the $147 high seen in July.

Crude has tumbled to less than $70 a barrel amid global recession fears, less than half the $147 high seen in July.

That has led to falling petrol prices at UK forecourts, and supermarket giants Asda, Tesco and Sainsburys have all announced a new round of cuts.

The retailers joined oil firm Total in slashing 3p off a litre of unleaded to take the price down to 94.9p. Morrisons is also cutting petrol costs.

The last time petrol was 94.9p at Asda was October 2007, and the supermarket said its latest cut marks the third time it has lowered its petrol prices in a fortnight.

The AA welcomed the latest price cuts but warned that moves by Opec to slash production meant that the recent easing in petrol price could be brought to an end.

Its president, Edmund King, said: "With Opec looking to halt the fall in oil prices, the outlook in coming weeks was looking more gloomy.

"This latest cut in supermarket fuel prices has come at just the right time and cuts the cost of a tank of petrol by £12.50 compared to the record prices in mid-July."

Energy Minister Mike O'Brien said: "This is a disappointing decision but it appears to be aimed at steadying the price fall rather than increasing it, so I don't want to see it being used as an excuse for increased retail prices.

"On the contrary we want to see the lower drop in oil prices that we've seen since July fed through to consumers and to help the economy more generally.

"All energy companies need to start providing some answers to their customers - not excuses - on when prices are likely to come down. We've got to make sure that the market works for people filling up their cars and heating their homes."

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