World oil prices weakened in Asian trade today with OPEC’s decision to cut supply at a time of global financial turmoil seen as hurting already weak energy demand further, dealers said.
New York’s main contract, light sweet crude for December delivery dropped 22 cents to USD 63.93 a barrel.
Brent North Sea crude for December delivery fell 33 cents to USD 61.72 a barrel.
The Organisation of the Petroleum Exporting Countries (OPEC), in a bid to shore up falling prices, announced Friday its output will be cut by 1.5 million barrels per day to 27.3 million barrels starting November. “OPEC is obviously aware of the problems facing the global economy,” said David Moore, a Sydney-based commodity strategist with the Commonwealth Bank of Australia.
“They were responding to weaker oil consumption… It was quite a decisive move by OPEC on Friday,” he said.
OPEC’s number two producer, Iran, said yesterday the cartel is likely to cut back further on production if the latest reduction does not stabilise crude prices.
“Be assured that if (Friday’s) decision is not effective on the market, OPEC will take steps to consolidate the market and stabilise prices at its next meeting,” Iran’s representative Mohammad Ali Khatibi said in an interview on state television. OPEC said its decision Friday to slash output would be reviewed at the cartel’s next meeting in Oran, Algeria, on December 17.
Many analysts have questioned the effectiveness of measures taken by OPEC, given the seriousness of the global financial crisis that has sharply reduced the prospects for economic growth and thus oil consumption.
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