Oil price slide as Opec maintains status quo
Oil price slide as Opec maintains status quo
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Tuesday, 12, Sep 2006 08:42
Oil prices fell by $1 yesterday to their lowest level since the end of March after oil cartel Opec agreed to keep production quotas unchanged.
The Opec conference in Vienna heard that inventory levels were more than adequate to manage fluctuations in the market brought on by potential supply disruptions or geopolitical tensions.
But as expected, Opec members hinted they may cut output at a meeting in Nigeria in December to protect against further falls in global oil prices.
Opec said it recognised the importance of maintaining oil market stability and as a consequence its members would take steps to ensure supply and demand remained balanced, with prices kept at reasonable levels.
"[F]or the time being, the organisation remains confident that the world is still adequately supplied with oil and that no shortage will occur," Opec said in a statement.
Brent crude dropped $1.09 to $64.24 (£34.27) a barrel in afternoon trading in London. Prices are down a fifth on record highs of $78.65 (£41.97) a month ago.
Crude oil for October delivery slumped one per cent to $65.61 (£35.01) a barrel on the New York Mercantile Exchange.
Opec, which oversees more than a third of the world's output, agreed to keep official production at 28 million barrels a day. The cartel's 11 member states include Saudi Arabia, Iraq and Iran.