Take that, OPEC.

The international oil cartel agreed Friday to cut daily production by 1.5 million barrels in a move to drive up prices on the international market — and, at the gas pump.

But, crude oil futures went in the other direction, falling 5 percent Friday in London trading on speculation that demand will continue to fall.

Oil fell sharply in morning trading on the New York Mercantile Exchange, with light sweet crude priced for December delivery at $64.40.

Hardline OPEC members Iran and Venezuela had been pushing members to slice production by 2 million barrels a day, with Iran's oil minister declaring, "The era of cheap oil is finished." When asked before Friday's meeting what price Iran would want for its oil, Gholam Hossein Nozari boasted, "The more the better."

OPEC, meanwhile, cited lower demand and market surpluses as reason for reducing output.

"The financial crisis is already having a noticeable impact on the world economy, dampening the demand for energy...and oil in particular," OPEC said in a press release after the decision was announced. "This slowdown in oil demand is serving to exacerbate the situation in a market which has been oversupplied with crude for some time."

It also noted that the collapse in oil prices — which have fallen over 55 percent since their mid-July peaks — may jeopardize oil projects and threaten supply growth in the medium term.

Iran is a traditional OPEC hardliner on prices and production and is the second largest producer within the organization. Saudi Arabia leads OPEC production, and was expected to lobby ministers for a smaller cut than proposed by Iran and Venezuela.

Iran has taken a liking to astronomical oil prices, using its newfound wealth to fuel its nuclear program in defiance of the U.S. and the global community.

Sam Gault, president of Gault Inc., a fifth-generation, family-owned oil business in Westport, Conn., said the Saudis still control OPEC's actions.

"Its really going to come down to whether Saudi Arabia wants to cut production, because they're the ones that can afford to cut production," Gault told FOXNews.com. "A lot of times the different members of OPEC wind up cheating on their quotas."

Analysts at JBC Energy in Vienna, Austria, said that the oil cartel is likely to request non-OPEC producers, including Russia, to cooperate with them "in order to hinder the price slide."

"Behind the scenes negotiations (with Russia) are going on and a well-publicized joint cut is still possible," the analysts wrote in a report Thursday.

Over the last four weeks, gasoline demand fell 4.3 percent from the same period last year,a ccording to industry analysts. Distillate fuel demand was down 5.8 percent, and jet fuel demand was down 9.2 percent.

FOXNews.com's Jennifer Lawinski, the Associated Press, Wall Street Journal and Reuters contributed to this report.