Oil falls further on dim prospect of OPEC output cut
Crude prices fell further Tuesday on dimming prospects of a production cut by the OPEC oil cartel despite a global supply glut, analysts said.
Brent North Sea crude hit a four-year low at $81.
23 a barrel.
The contract for delivery in December later recovered to $81.
88 in London midday deals, though still down 46 cents compared with Monday's close.
US benchmark West Texas Intermediate (WTI) for December lost 23 cents to $77.
17 a barrel.
WTI had tumbled $1.
25 in New York on Monday after Kuwait said the 12-nation Organization of the Petroleum Exporting Countries is unlikely to cut output when it meets in Vienna on November 27.
Kuwaiti oil minister Ali al-Omair on Monday said that he did not expect OPEC to make any production cut at its regular output meeting in the Austrian capital, home to the cartel's headquarters.
"The weakness in prices reflects a realisation among investors on the difficulty of OPEC getting through an agreement on cutting output to deal with global oversupply," Michael McCarthy, a strategist at traders CMC Markets, told AFP on Tuesday.
"It is quite clear that a number of OPEC countries would prefer a cut, but there will be considerable resistance from Saudi Arabia," he added.
Oil prices plunged to multi-year lows last week after Saudi Arabia, OPEC's kingpin and the world's top producer, cut its prices for crude sold to the US market.
Analysts interpreted the move as an effort to maintain market share as it faces competition from cheaper oil from US shale fields.
OPEC pumps about a third of global crude and is currently producing just under 31 million barrels per day, around one million higher than its ceiling.
Investors are also monitoring the situation in eastern Ukraine as fears increase of a resumption of all-out fighting between government forces and pro-Russian rebels in violation of a ceasefire agreement.
Ukraine is a key conduit for Russian natural gas exports to Europe.
© 2014 AFP