Oil prices slid Thursday on profit-taking after rising to fresh six-month highs overnight, as OPEC ministers gathered for a key meeting where they are expected to refrain from cutting output.
In morning London trade, New York's main futures contract, light sweet crude for delivery in July, dipped 41 cents to 63.04 dollars per barrel. The contract had spiked as high as 63.82 on Wednesday -- last seen in early November.
London's Brent North Sea crude for July dropped 50 cents to 62.00 dollars per barrel on Thursday.
In Vienna, the Organisation of Petroleum Exporting Countries (OPEC) was predicted to hold its daily output target at 24.84 million barrels, with hopes of recovering oil demand and higher prices convincing members to maintain the status quo.
Oil had surged Wednesday on the back of buoyant equities and "supportive" OPEC comments that strengthened expectations of economic recovery and higher energy demand, traders said.
"Crude futures pushed to fresh six-month highs on Wednesday as more supportive rhetoric from OPEC helped to push prices up ahead of the group's meeting later today," said analyst Andrey Kryuchenkov at VTB Capital.
"Once again, the influential Saudi Oil Minister Ali al-Nuaimi has reconfirmed that the kingdom expects oil prices to push towards 75-80 dollars this year amid the improving economic outlook."
The 12-member oil exporter group believes the market is oversupplied, as shown by the high stock levels, but it seems satisfied with prices after a rally in the last two weeks that has taken crude above 60 dollars a barrel.
On the eve of the meeting, Qatar backed calls by Saudi Arabia, the most influential power in the cartel, to keep the group's output target steady.
"They won't cut," Qatari Energy Minister Abdullah bin Hamad al-Attiyah said as he arrived in Vienna.
But he warned about unfounded optimism sparked by recent higher prices, underlining that demand for oil was weak as major economies remain mired in recession.
On Wednesday, Nuaimi pointed to signs of increased demand in Asia and the United States and implied that a global economic recovery would help absorb current overproduction.
Algeria's energy minister has said there is a consensus for no change in output policy by OPEC and even hardline Iran, whose oil minister usually pushes for cuts, conceded that the group's production target would remain the same.
However, prices remain beneath the 75 dollars that OPEC members say they want in the longer term.
Economists warn however that higher prices now could delay an economic recovery and OPEC members must balance their desire for higher revenues against the impact expensive energy has on global demand.
OPEC, which pumps 40 percent of world oil, cut its production target three times late last year to stabilize prices that tumbled from record highs above 147 dollars a barrel in July 2008 to just 32.40 dollars in December.
Aside from OPEC, traders will focus later Thursday on the weekly energy inventories report in the United States. The release is due one day later than normal because of a public holiday on Monday.
