THE OPEC cartel gave warning yesterday that the collapse in crude prices had already put some big oil projects in jeopardy - hinting that future supplies were in danger.

It raised the alarm as it slashed production in an effort to put a floor on plummeting prices.

The oil producers' cartel reduced its official quota level by 1.5 million barrels a day from November 1st. However, prices shrugged off the news and continued to fall, reflecting the severity of the economic crisis and the speed with which it was spreading to important oil-demand growth areas such as China.

Opec said in its communique that oil prices had witnessed a dramatic collapse, "unprecedented in speed and magnitude", to just above $60 a barrel from July's record high of almost $150.

The falling trend "may put at jeopardy many existing oil projects and lead to the cancellation or delays of others, possibly resulting in a medium-term supply shortage".

Opec's warning was made as some small oil companies are starting to delay or cancel some of their most expensive projects.

Analysts said the current low prices could sow the seeds of future record highs. They said the recovery of the global economy, in one to two years, could coincide with lower-than-expected supply growth owing to a combination of the current lack of credit for new oilfields and project cancellations.

Ali Naimi, Saudi Arabia's oil minister, said the decision to cut production "was straightforward . . . Opec will do whatever is necessary to balance oil markets."

Yesterday prices fell to a 16-month low of $62.55 a barrel. - ( Financial Timesservice)