Oil prices drop on eve of OPEC meet

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Posted on November 28th, 2008 by admin
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LONDON: Oil prices fell on Friday as key ministers from the OPEC producers” group meeting in Cairo suggested the cartel would wait until next month before announcing any decision to cut output.

Organization of Petroleum Exporting Countries ministers are holding consultations in the Egyptian capital this weekend amid speculation they might further reduce production to stem the slide in crude prices.

“Here we will prepare some data and maybe the final decision will be in Algeria,” Iranian Oil Minister Gholam Hossein Nozari told reporters, referring to a planned extraordinary OPEC meeting in Algeria on December 17.

Light sweet crude for delivery in January was down 1.86 dollars to 52.58 dollars a barrel on the New York Mercantile Exchange (NYMEX).

On London’’s Inter Continental Exchange (ICE), Brent North Sea crude for January dropped 78 cents to 52.35 dollars in late morning trade.

“If production cuts are not announced this weekend, this could further add to the downward pressure on oil prices,” Barclays Capital analyst David Woo said on Friday in London.

OPEC Secretary General Abdalla Salem El-Badri had said ahead of Saturday’’s meeting that the oil market was “over-supplied” — an indication that the group sees current production levels as too high.

The group, which pumps 40 percent of world oil, has watched oil prices collapse since striking record highs above 147 dollars in July, sparking serious concern among its members about plunging revenues.

OPEC ministers agreed in Vienna last month to reduce production by 1.5 million barrels a day from November 1 as they sought to defend tumbling prices.

But the market has since crumbled further, approaching the lowest levels for nearly four years on growing concern that a painful global recession could savage demand for energy, traders said.