ORAN, ALGERIA -- OPEC on Wednesday agreed to slash 2.2 million barrels from its daily production -- its largest single cut ever -- while bloc outsiders Russia and Azerbaijan announced their own cuts of hundreds of thousands of barrels from the market. "I hope we surprised you," OPEC President Chekib Khelil said when asked whether the size of the cut would shock moribund oil markets into an upward trend. "If you're not surprised we need to do something about it." And yet markets weren't impressed. Crude oil sank to $40.20 after the announcement, a level not seen since the summer of 2004 and a clear sign investors are more worried that the world is heading for a long and painful recession in which energy use will continue to erode. In just five months, crude has given up all of the price gains made over the past four years. AP Photo by Quahab Hebbat - OPEC members meet in Oran, Algeria, where they agreed to their biggest one-time production cut. Buy Photo More Business Chrysler shutters plants for a month Fuel prices fall, but taxes stay up Not as bad as last time Shearon Harris good till 2046 Cree's lights looking bright Home loans to the poor good policy, UNC says OPEC had already announced cuts totaling 2 million barrels this year, also with little effect. The unprecedented production cuts and the market reaction show just how fast energy demand has fallen during the worst economic downturn in at least a generation."You've got a commodity that people are buying less of because they can't afford to buy more," said Phil Flynn, an analyst at Alaron Trading Corp. "People are fearful. They have a lack of confidence in the economy. They're closing their factories."

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