SINGAPORE - Oil prices were lower in Asian trade Friday following an overnight rally ahead of Opec’s weekend meeting to discuss output levels, analysts said.
New York’s main futures contract, light sweet crude for April, dipped 34 cents to $46,69 a barrel. Brent North Sea crude for delivery in April declined 33 cents to 44,76. Analysts said the market was looking to the Organisation of the Petroleum Exporting Countries (Opec) meeting in Vienna on Sunday to discuss whether to slash production.
The cartel pumps about 40 percent of the world’s crude supplies. "Most industry specialists seem to anticipate another cut but we are not convinced there is a consensus yet among the cartel members," said Julian Jessop, chief economist of London-based research house Capital Economics.
"Even if Opec does cut quotas by the 500,000 barrels per day that some expect, the impact on prices should be limited. For a start, by far the greater issue is the weakness on the demand side," he said. "Further production cuts that simply keep pace with weakening demand might put a floor under prices but they are not going to trigger a strong recovery."
Opec had already agreed to reduce output by 4,2 million barrels per day late last year, "so another half million would not represent a fundamental shift," Jessop said. Production quotas may also be harder to enforce now, with many crude producers experiencing a sharp economic slowdown or outright recession, he said.
