Oil steady above USD 36, lowest levels in four years

SINGAPORE: World oil held steady above USD 36 today, at its lowest levels in more than four years, after OPEC's announcement of a record production cut failed to rally prices.

New York's main futures contract, light sweet crude for delivery in January, rose four cents to USD 36.26 a barrel, off its morning low of 36.04.

The contract dived USD 3.84 to USD 36.22, its weakest finish since July 2004, on the New York Mercantile Exchange yesterday.

Brent North Sea crude for February delivery slumped USD 2.17 to settle at USD 43.36 a barrel yesterday in London.

A slowing global economy and resulting fears of weaker energy demand have pulled prices down from record highs of USD 147 a barrel reached in July.

In a bid to shore up prices, ministers of the Organisation of the Petroleum Exporting Countries (OPEC) on Wednesday approved a record output cut of 2.2 million barrels a day, about 7.0 per cent of the cartel's output quota. Before the latest cuts, OPEC's official daily output target was 27.3 million barrels a day.

"The verdict (of falling prices) was a resounding vote of no-confidence in the cartel's ability to curtail production given its previous tendencies to backslide on commitments, particularly by countries who are financially strapped," said MF Global oil analyst Ed Meir.