Singapore: Oil fell by more than a dollar on Monday, towards $53 a barrel, after producer cartel Opec decided over the weekend to delay a third supply cut to its next meeting later in December as economic woes cripple oil demand.
Gulf producers want to see strict compliance with recent output curbs of 2 million barrels per day (bpd) before considering further reductions when the Organization of the Petroleum Exporting Countries (Opec) meets in Algeria on December 17.
US light crude for January delivery fell $1.13 to $53.30 a barrel, after having dipped below $53 earlier.
Oil settled down 1 cent at $54.43, against its Wednesday settlement in thin trading in a shortened, post-Thanksgiving holiday session on Friday. London Brent crude slid $1.27 to $52.22.
Delegates said ministers discussed how much more they needed to cut in December. Most, including Gulf producers led by Saudi Arabia, saw a requirement to trim another 1 to 1.5 million bpd.
Prices lost almost 20% in November, after a 32% drop in October, the biggest monthly fall ever, despite Opec’s two supply cuts since September aimed at taking around 2 million bpd out of the market.
Oil has tumbled from record highs over $147 a barrel struck in July as demand in the United States and other large consumer nations has slumped amid an economic crisis.
In a rare move, Saudi Arabia on Saturday cited $75 a barrel as a “fair price” for oil in order to keep the more expensive new projects at the margins of world supply on track, the first time in years that the world’s biggest exporter has identifed a target for crude prices.