Nov 14, 2008 (AFP) -
Oil traded slightly lower in Asia on Friday despite expectations the OPEC cartel could announce another production cut late this month, analysts said.
In afternoon trade, New York's main futures contract, light sweet crude for delivery in December, fell 40 cents to 57.24 dollars a barrel after a gain of 2.08 dollars to 58.24 on the New York Mercantile Exchange Thursday.
Brent North Sea crude for January delivery fell 49 cents to 55.75 dollars a barrel.
The December contract expired at the close of trading in London on Thursday, down 38 cents at 51.99.
Oil prices have been trading in line with equity markets, said Victor Shum of Purvin and Gertz international energy consultants in Singapore. Asian stocks and oil prices were higher early on Friday but later pared their gains.
“I would say that given the fears about global recession, I wouldn't trust this bounce in oil pricing and the bounce in stock markets,” Shum said.
Since scaling historic highs above 147 dollars in July, prices have shed about 60 percent on mounting evidence of slowing global economic growth and energy demand.
The Organisation of the Petroleum Exporting Countries (OPEC) was “very likely” to hold an emergency meeting on November 29 in Cairo to discuss tumbling crude prices, an OPEC source told AFP on Thursday.
The cartel's president, Chakib Khelil, indicated last weekend that output may be further reduced if oil prices remain below the cartel's preferred range of 70 to 90 dollars a barrel.
OPEC pumps about 40 percent of the world's oil. The group decided last month to cut output by 1.5 million barrels a day to 27.3 million barrels, and analysts say that if oil prices remain under pressure, the cartel will likely announce further reductions in output.
But Shum said such cuts will have little effect on oil prices, and that OPEC would have a hard time sticking to lower targets as long as demand is expected to be poor.
Instead, production cuts by OPEC would prepare the oil market for a rebound when signs of global economic recovery emerge, perhaps at the end of next year, Shum said.
The head of the International Energy Agency (IEA), policy adviser to major industrialised countries, warned Friday that oil prices could soar dramatically after the world economy picks up, due to delays in energy investment during the current credit crisis.
“What we are worried about is that oil development is being delayed,” IEA executive director Nobuo Tanaka told a news conference in Tokyo. “As supply falls, prices are likely to surge when the global economy gets back on its feet,” he said.
On Thursday the IEA slashed its 2009 oil price forecast to 80 dollars a barrel from 110 dollars.