Oil prices sink further as traders await OPEC meeting
World oil prices dived under $88 on Monday as traders mulled whether crude producers' group OPEC would lift production at a vital meeting this week.
By PTI |
London: World oil prices dived under $88 on Monday as traders mulled whether crude producers' group OPEC would lift production at a vital meeting this week.
New York's main contract, light sweet crude for January delivery, shed 1.01 dollars cents to $87.70 per barrel.
Brent North Sea crude for January cost 85 cents to $87.41.
Last week, prices plunged on speculation that OPEC might ramp up output, and amid fears of lowing US economic growth. The sharp drop in pries came despite an explosion on a key pipeline linking Canada with the United Sates.
OPEC ministers were due to arrive in Abu Dhabi today for a meeting to decide whether the 13-member cartel would boost oil supplies or leave production unchanged.
"There is still quite a bit of uncertainty as to what OPEC will do on Wednesday when they meet in Abu Dhabi but the market has already priced in an expected boost in production," said Victor Shum of energy consultancy Purvin and Gertz.
OPEC is concerned that raising output could oversupply the market, further dampening prices.
But leaving output quotas unchanged on Wednesday could send oil prices to recent record highs above USD 99 and even above the psychological century mark for the first time, crimping global economic growth, analysts said.
Traders said the pressure on OPEC to raise output has eased considerably -- because prices are now off recent record levels.
"Ahead of the OPEC meeting later this week our view is that OPEC are now unlikely to raise the output quota," said Sucden analyst Michael Davies.
New York's main contract, light sweet crude for January delivery, shed 1.01 dollars cents to $87.70 per barrel.
Brent North Sea crude for January cost 85 cents to $87.41.
Last week, prices plunged on speculation that OPEC might ramp up output, and amid fears of lowing US economic growth. The sharp drop in pries came despite an explosion on a key pipeline linking Canada with the United Sates.
OPEC ministers were due to arrive in Abu Dhabi today for a meeting to decide whether the 13-member cartel would boost oil supplies or leave production unchanged.
"There is still quite a bit of uncertainty as to what OPEC will do on Wednesday when they meet in Abu Dhabi but the market has already priced in an expected boost in production," said Victor Shum of energy consultancy Purvin and Gertz.
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OPEC is concerned that raising output could oversupply the market, further dampening prices.
But leaving output quotas unchanged on Wednesday could send oil prices to recent record highs above USD 99 and even above the psychological century mark for the first time, crimping global economic growth, analysts said.
Traders said the pressure on OPEC to raise output has eased considerably -- because prices are now off recent record levels.
"Ahead of the OPEC meeting later this week our view is that OPEC are now unlikely to raise the output quota," said Sucden analyst Michael Davies.
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