AFP: World oil prices continue falling on demand worries
LONDON (AFP) — Oil prices fell further on Wednesday on renewed worries about energy demand in the face of slowing global growth and despite a likely OPEC output cut later this week, analysts said.
Traders were also awaiting the latest weekly snapshot on crude reserves in key energy consumer the United States.
New York's main contract, light sweet crude for December delivery, fell 2.74 dollars to 69.44 dollars per barrel. The November contract expired Tuesday, plunging 3.36 dollars to finish at 70.89 dollars.
London's Brent North Sea crude for December delivery dropped 2.32 dollars to 67.40 dollars a barrel, after shedding 2.31 dollars the previous day.
Crude futures have rallied in recent sessions amid growing signals that OPEC is likely to cut production when the oil producers' cartel meets in Vienna on Friday.
However, worries about weaker energy consumption as the world's developed economies hit a weak patch have investors fretting, dealers said.
"At the moment, concerns over weakening demand seemingly outweigh the prospect of reduced supply stemming from the likelihood that OPEC will officially reduce output on Friday," said analysts at energy consultancy John Hall Associates.
"Any cut is likely to take at least a couple of months to have any measurable impact on the market though, so it remains to be seen how the market will interpret any decision."
They added: "With the prospect that growth in emerging economies is also now at risk, future demand growth forecasts may well be revised lower which would lead to prices possibly falling further."
Ahead of the OPEC meeting, several key members of the oil cartel have already voiced their support for production levels to be cut to shore up the market.
Oil prices have halved since striking record highs of above 147 dollars in July, prompting concern among OPEC nations about their falling revenues.
Iran's oil minister said on Tuesday that Tehran believes OPEC should cut production by between two million and 2.5 million barrels a day, and that prices could go higher than 150 dollars a barrel.
Iran is the second largest exporter in OPEC and its economy is heavily dependent on oil and gas income.
Qatar's Energy Minister Abdallah bin Hamad al-Attiyah said Tuesday that the "best price" for oil was 80 to 90 dollars a barrel while Libya said Monday it backed an output cut of more than one million barrels a day.
The oil market was also dampened Wednesday by the strengthening US currency, which makes dollar-priced crude more expensive for investors holding weaker currencies.
