OPEC says it is trimming 2.2 million barrels a day from its oil output — the largest ever cut at one time — to buttress crude prices that have plummeted over 70 per cent from their summer highs of near $150 US.

Despite the production cut announcement, the price of oil closed down $3.54 at $40.06 US a barrel on the New York Mercantile Exchange. At one point, oil dipped under as low as $39.98 — the first time crude has gone under $40 US a barrel since July 2004.

A statement from the oil cartel says its latest announcement means it is taking 4.2 million barrels a day off the market compared with September levels.

The 4.2 million figure includes more than 500,000 barrels of overproduction OPEC said in September it would eliminate, as well as a formal cut of 1.5 million barrels a day that the organization agreed on last month.

That's topped off by the new reduction of 2.2 million barrels announced Wednesday.

Members among the 13-nation Organization of the Petroleum Exporting Countries were officially producing a daily 29.045 million barrels of crude in September.