Sharp drop in OPEC crude price before Friday cartel meeting
Two days before the Organization of the Petroleum Exporting Countries (OPEC) was set to meet in Vienna to discuss production cuts, the cartel's basket price fell by 3.53 dollars Wednesday.
Pulled down by falling stock markets and reports of growing stocks and slowing demand in the United States, one barrel (159 litres) of OPEC crude stood at 60.82 dollars at mid-week, compared with 64.35 dollars on the previous day, reported dpa.
While OPEC oil ministers have indicated they might consider cuts between 1.5 million and 2.5 million barrels per day, analysts said that a small cut would not be enough to prop up prices.
In September, the 11 cartel members subject to the output quota produced an average 29.1 million barrels per day, around 270,000 barrels per day above the agreed limit.
"As the markets are in serious disorder, this 1 million barrel per day cut may be seen as too little too late and could even lead to a significant drop in prices," Vienna-based energy consultants JBC said Thursday.
Whether measures taken on Friday would bring the OPEC price back above 80 dollars depended also on the global economy, the health of the stock markets and on whether the euro would gain value against the dollar, JBC said.
Another factor behind the lower oil prices on Wednesday was that crude stocks in the United States were rising more than expected last week, analysts said.
In addition, US oil product supplies to households fell by 8.5 per cent last week, compared with the same period last year, according to the US Energy Information Administration.
OPEC calculates an average basket price based on 13 important brands produced by its members. Indonesia and Iraq are included in the basket, but not in the production quota.