O'Brien says OPEC's output cut "disappointing"

LONDON (Reuters) - OPEC's decision to cut output by 1.5 million barrels per day is "disappointing," Energy Minister Mike O'Brien said on Friday, but warned energy firms in the country not to use it as an excuse to raise fuel prices.

"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," O'Brien told Reuters by email.

"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."

The Organisation of the Petroleum Exporting Countries moved to slash oil production by 1.5 million bpd at an emergency meeting in Vienna on Friday, in response to a near 60 percent decline in oil prices since July.

Benchmark Brent crude futures are trading near $62 a barrel, having plummeted from a record high above $147 three months ago in response to fears of a demand crushing global slowdown.

British Prime Minister Gordon Brown said earlier this month it would be "wrong" for OPEC to cut production just as oil prices were falling, warning that high oil prices were dangerous for the world economy.

Brown has also urged British retailers to cut petrol prices to reflect the drop in oil prices.

The decision by OPEC comes as the main oil consuming countries are facing a sharp recession, the International Energy Agency said on Friday.

The UK economy shrank by 0.5 percent in the third quarter of 2008, official data showed on Friday, more than expected and the first fall in 16 years, stoking fears of a painful and prolonged recession.

(Reporting by David Sheppard; editing by James Jukwey)