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| Oil shrugs off looming output cut | |
| (40 minutes later) | |
| Oil prices have fallen further as fears of slumping demand overshadow possible production cuts by Opec. | |
| US light, sweet crude dropped below $66 a barrel at one point, while London Brent fell almost $5 to $62.66 before clawing back some of its losses. | |
| Opec, the oil producers' cartel, has started an emergency meeting in Vienna to discuss possible production cuts as it tries to prop up falling prices. | |
| Analysts expect Opec to cut output by at least one million barrels a day. | Analysts expect Opec to cut output by at least one million barrels a day. |
| The meeting, originally planned for November, was brought forward because of growing concerns about the impact of the financial crisis on the oil market. | |
| Oil prices hit an all-time high of $147 a barrel in July, but have since fallen back steadily. | |
| Price now stand at levels not seen since June, amid fears a global economic recession will cut demand. | |
| Motorists benefit | |
| "If it wasn't for an expected Opec cut, there is a strong possibility that oil prices would be falling a lot more, considering how poorly Asian stocks are performing," said David Moore, a commodities strategist at the Commonwealth Bank of Australia. | "If it wasn't for an expected Opec cut, there is a strong possibility that oil prices would be falling a lot more, considering how poorly Asian stocks are performing," said David Moore, a commodities strategist at the Commonwealth Bank of Australia. |
| Members of Opec are responsible for producing about 40% of the world's total supply. | Members of Opec are responsible for producing about 40% of the world's total supply. |
| The price that motorists have been paying for petrol at forecourts has been falling recently, but some observers believe any move to reduce production could reverse that trend. | The price that motorists have been paying for petrol at forecourts has been falling recently, but some observers believe any move to reduce production could reverse that trend. |
| Edmund King, president of the UK motoring body, the Automobile Association, said he welcomed the recent price falls. | Edmund King, president of the UK motoring body, the Automobile Association, said he welcomed the recent price falls. |
| But he warned: "With Opec looking to halt the fall in oil prices, the outlook in coming weeks is looking more gloomy." | But he warned: "With Opec looking to halt the fall in oil prices, the outlook in coming weeks is looking more gloomy." |
| Downward trend | Downward trend |
| A number of the cartel's 12 members say output should be reduced to stop the fall in prices: Venezuela wants production to be cut by a million barrels a day - 3% of Opec's total output. Iran has called for a cut twice that size. | A number of the cartel's 12 members say output should be reduced to stop the fall in prices: Venezuela wants production to be cut by a million barrels a day - 3% of Opec's total output. Iran has called for a cut twice that size. |
| The two countries are thought to be most in need of a relatively high oil price - around $100 a barrel - to finance government spending, says the BBC's economics correspondent, Andrew Walker. | The two countries are thought to be most in need of a relatively high oil price - around $100 a barrel - to finance government spending, says the BBC's economics correspondent, Andrew Walker. |
| Opec is widely expected to cut production after the meeting | Opec is widely expected to cut production after the meeting |
| Iran relies almost entirely on its oil exports for government revenue: for every dollar off the price of a barrel of oil, the country loses roughly $1bn a year in revenue. | Iran relies almost entirely on its oil exports for government revenue: for every dollar off the price of a barrel of oil, the country loses roughly $1bn a year in revenue. |
| But on Thursday, Saudi Oil Minister Ali al-Naimi would not be drawn on the subject of a possible output reduction, saying the price of oil would be determined by the market. | But on Thursday, Saudi Oil Minister Ali al-Naimi would not be drawn on the subject of a possible output reduction, saying the price of oil would be determined by the market. |
| Opec's biggest oil producer, Saudi Arabia may be wary of aggravating economic problems in oil importing countries, our correspondent adds. Nor does it want to see high prices that might encourage users to switch away from oil to alternative energy sources. | Opec's biggest oil producer, Saudi Arabia may be wary of aggravating economic problems in oil importing countries, our correspondent adds. Nor does it want to see high prices that might encourage users to switch away from oil to alternative energy sources. |
| Opec president Chakib Khelil said: "The decision should not leave the producer countries in the situation where they will be joining the group of countries which are already suffering from the financial crisis." | Opec president Chakib Khelil said: "The decision should not leave the producer countries in the situation where they will be joining the group of countries which are already suffering from the financial crisis." |
| Despite Opec's expected output reduction, oil analysts said crude prices could fall as low as $60 a barrel, as signs that the world is heading for a recession continue to grow. | Despite Opec's expected output reduction, oil analysts said crude prices could fall as low as $60 a barrel, as signs that the world is heading for a recession continue to grow. |
| The cartel is reluctant to let the price drop below $70 a barrel. | The cartel is reluctant to let the price drop below $70 a barrel. |