LONDON (Reuters) - Oil slipped below $53 a barrel on Friday on a developing view that OPEC ministers gathered in Cairo this weekend may decide to delay any cut in supply until they meet again in December.
London Brent crude was down 45 cents at $52.68 by 9:40 a.m. EST. Brent looked more representative of market sentiment than U.S. crude as trading in the United States was still subdued because of the Thanksgiving holiday weekend.
U.S. light crude for January delivery was $1.48 a barrel lower at $52.96, down from around $54 in late trading on Thursday.
The NYMEX trading floor was closed on Thursday, though Globex trading continued.
U.S. crude is on course to end the month down more than 20 percent, despite a 2-million-barrel-per-day supply cut by the Organization of the Petroleum Exporting Countries (OPEC) agreed at meetings in September and October.
"In theory, if supply gets cut, prices should go up, but the problem is what is the level of demand," said Adrian Pankiw, strategist at Henderson Global Investors. "The question is: is OPEC cutting supply faster than demand is falling?"
Falls in demand in top energy consumer the United States and other industrialized countries have helped drive U.S. crude down almost $100 from a record peak of more than $147 a barrel in July. It fell by almost a third last month, its biggest monthly drop ever.
Global oil demand is expected to decline slightly this year and next, the first fall in a generation because of the world economic downturn, according to a Reuters poll.
THIRD SUCCESSIVE CUT?
OPEC has not ruled out making its third output cut in as many months, but some believe the full impact of its existing cuts have yet to be felt.
"Combined with weakening non-OPEC supplies, the projected OPEC's output curtailment suggests that the oil market could actually tighten moving into 2009," Barclays Capital said in a research note.
Oil futures prices several years out are already showing a return to an upward track. For November 2010, for example, the price is above $70 a barrel and for November 2013 more than $80.
Several OPEC delegates have said the Cairo gathering is likely only to measure compliance with existing cuts, leaving a decision on any further reduction until the group's next policy-setting meeting on December 17 in Algeria.
"I don't think a decision will be taken at the meeting in Cairo. A decision could be taken at the meeting in Algeria," Kuwaiti Oil Minister Mohammad al-Olaim said on Friday.
Iran's Oil Minister Gholamhossein Nozari reinforced this view, saying the Cairo talks would likely review market conditions but any final decisions on output levels would be deferred to their meeting next month.
"It is a consultative meeting," Nozari said.
But Shokri Ghanem, the head of the Libyan OPEC delegation, said on Thursday another immediate cut should not be ruled out.
A Reuters poll this week of 15 analysts forecast by a narrow margin that OPEC would make no announcement of a further reduction in oil output this weekend but would probably do so at its meeting in Algeria.
(Additional reporting by Christopher Johnson in London and Maryelle Demongeot in Singapore; editing by James Jukwey)
