LONDON (Dow Jones)--Crude oil futures traded lower Tuesday in London as participants remained on the sidelines ahead of an emergency meeting by the Organization of the Petroleum Exporting Countries Friday.
Market participants were weighing the possibility of tighter supplies - through a potential OPEC production cut - against weak oil demand and slowing economic growth in many industrialized economies.
"A lot of traders are flat and don't have a firm view," about where prices will go next, a trader in London said.
At 1048 GMT, the front-month December Brent contract on London's ICE futures exchange was down $0.58 at $71.45 a barrel.
The front-month November contract on the New York Mercantile Exchange was trading $0.27 lower at $73.98 a barrel.
The ICE's gasoil contract for November delivery was up $18 at $709.25 a metric ton, while Nymex gasoline for November delivery was down 223 points at 169.78 cents a gallon.
"The general trend is still of uncertainty," said Olivier Jakob, managing director of Petromatrix consultancy in Switzerland.
OPEC's president and Algerian Energy Minister Chakib Khelil called on non-OPEC oil producers to share in production cuts announced by the group, according to a report Tuesday in Algerian state newspaper El-Moudjahid.
"If those countries, especially Russia, Norway and Mexico, don't contribute to the reduction in production, the decision by OPEC (to cut) will be more difficult and more painful," Khelil said.
But Norway, the world's fifth biggest oil exporter, hasn't considered reducing its oil output to stem falling crude prices, a spokesman for the Oil Ministry told Dow Jones Newswires.
Opinions varied about the extent to which OPEC may rein in output. Cuts deeper than 1 million barrels a day are unlikely, and would spell "political suicide" for OPEC, a trader said.
"Japan, Europe and U.S. are in a bad place, China is slowing faster than expected," and OPEC producers could be blamed for exacerbating an economic slowdown, he said. "Its going to be very interesting."
Another trader in London said any losses would be limited ahead of the OPEC summit.
"I think it's certain that they will cut something, but it's tough to predict volume and timing," he said.
But even an OPEC rollback may not have a restorative effect on prices in the face of persistent economic gloom and battered financial markets.
"Concerns about weakening crude and product demand continue to mount, and steadily eroding global refining margins provide evidence to back up these concerns," said Mike Wittner, global head of oil research at Societe Generale.
He said crude prices would continue to be weighed down by risk aversion and a broad-based deleveraging in markets, which is expected to continue for at least one or two quarters.
"Despite a potential significant production cut, it is widely agreed that ongoing lower demand will keep on making headlines, remaining the primary price driver," said Marius Paun, a broker at ODL Securities in London.
Technical charts continued to signal prices heading on a downward trajectory, said Julian Keites of Newedge group.
"The overall downtrend is still strong and no sign of extreme trend reversals," Keites said. "This will make technical traders look to sell rallies."
