Oil fell towards $53 a barrel today, ending the month down more than 20 per cent, as OPEC ministers prepared to meet in Cairo to discuss potential further supply cuts as the global economic slowdown eats into oil demand.
The Organization of the Petroleum Exporting Countries, which is to hold an informal meeting on Saturday in Cairo, is struggling to slice output fast enough to keep pace with a recessionary reduction in fuel demand in the West that has sent crude prices down nearly two-thirds since July.
US light crude for January delivery fell to $53.51 barrel by 2.08am, having fallen by more than $1 earlier, and down 93 cents from its settlement on Wednesday.
The NYMEX trading floor was closed yesterday in the United States for the Thanksgiving Day holiday, though Globex trading continued. London Brent crude settled 79 cents lower yesterday at $53.13. It was down 33 cents at $52.80.
"We are waiting for OPEC. Some of the member countries are pushing for a cut but that is not acceptable to consuming countries. It is too early to see if economic sentiment is turning," said Tetsu Emori, fund manager at Astmax Co.
Oil prices have fallen by more than a fifth this month, adding to last month's more than 32 per cent fall, which was the biggest monthly drop ever.
Several OPEC delegates have said in the run-up to this latest gathering that it was likely only to measure compliance with the cuts made since September and leave a decision on a further reduction until its next policy-setting meeting on December 17th in Algeria.
But Shokri Ghanem, the head of the Libyan OPEC delegation, said another immediate cut should not be ruled out and warned that oil prices may have further to fall before a rebound.
Reuters