Crude oil fell to a one-week low on speculation that OPEC will maintain production targets as the recession curbs fuel consumption. OPEC should “stay the course” on output policy, Saudi Oil Minister Ali al-Naimi said today in Vienna, where the group meets this week. A Persian Gulf oil official familiar with the matter said yesterday that OPEC won’t change its quotas. Oil also dropped as the dollar strengthened against the euro, reducing the appeal of commodities as an alternative investment. “All indications are that OPEC will leave quotas alone,” said Tom Bentz, a senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. “Most members see no need for a further cut after the recent rise in prices.” Crude oil for July delivery fell $1.73, or 2.8 percent, to $59.94 a barrel at 9:38 a.m. on the New York Mercantile Exchange. Futures dropped to $59.53, the lowest since May 19. Prices are up 34 percent this year. The exchange will combine yesterday and today’s transactions for settlement purposes because U.S. floor trading was shut for the Memorial Day holiday. Saudi Arabia is the biggest and most influential member of OPEC. The group is likely to keep daily output quotas unchanged at 24.845 million barrels when it meets two days from now, according to a Bloomberg News survey of 27 analysts. “Sixty dollars is not a hurdle for OPEC, most of the members can balance their budgets at that level and so there’s no reason for them to cut,” said Eugen Weinberg, an analyst with Commerzbank AG in Frankfurt. “Prices need to correct to $50 a barrel or below.” Mixed Indications Comments from other OPEC members yesterday gave mixed indications about the group’s likely course of action. Algerian minister Chakib Khelil said the group will be careful about harming the global economic recovery, while Libyan official Shokri Ghanem said there’s a 50 percent chance of a supply cut. The dollar rose against the euro for the first time in seven days after Britain’s Telegraph newspaper cited a German banking regulator as saying debt at the nation’s biggest lenders may increase. A stronger dollar limits investors’ need for assets to hedge against inflation such as commodities. The dollar strengthened 0.7 percent to $1.3926 per euro, from $1.4017 yesterday. “You are seeing energy prices down across the board because of dollar strength,” said John Kilduff, senior vice president of energy at MF Global in New York. “There’s growing concern about the euro-zone economies.” Brent crude for July settlement fell $1.11, or 1.8 percent, to $59.10 a barrel on London’s ICE Futures Europe exchange.

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