Singapore: World oil prices slipped in Asian trade Tuesday ahead of a key Opec meeting in Vienna amid mixed production signals from the cartel’s members, dealers said.
New York’s main contract, light sweet crude for October delivery dropped 55 cents to $105.79 a barrel from $106.34 at the close of floor trading Monday in the US.
Brent North Sea crude for October delivery fell 14 cents to $103.30.
The Organisation of Petroleum Exporting Countries (Opec) is due to meet later Tuesday in Vienna to discuss the group’s production targets but comments so far from key members suggest a split on whether output should be reduced in the face of declining prices in recent months.
Algeria, Iran, Venezuela and Libya have raised fears of oversupply and suggested the need for a reduction in output, while Kuwait, the United Arab Emirates and Ecuador have called for no change.
Opec President and Algerian Energy Minister Chakib Khelil said on Monday that a cut in production by the 13-member group, which pumps 40% of world oil, would be discussed.
“Everybody agrees that we will have an oversupply problem of between half a million and one-and-a-half million (barrels per day) by early next year,” he said as he arrived in Vienna.
At present, Opec is believed to be producing about a million barrels per day (bpd) more than its official ceiling of 29.67 million bpd, with Saudi Arabia accounting for most of the excess.
Some analysts believe that Saudi Arabia, the de facto leader of Opec and the world’s biggest producer, would be happy to see prices fall below $100 a barrel to help stimulate economic growth.
Kuwait, a Gulf ally of Saudi Arabia, said Monday that it saw no need for a reduction.
“We think that the supply is more than the demand,” said Kuwaiti Oil Minister Mohammad Al-Olaim. “For the time being we think there’s no need for a cut in the production because... we are worried a little bit about the slow growth globally.”
Crude prices rose to record levels above $147 July but have fallen in recent weeks on growing worries that a US-led global slowdown will eventually crimp the appetite for energy.