Oil lower ahead of OPEC meeting

Oil rigs extract petroleum in Culver City, California. AFP FILE PHOTO

Singapore – Oil was lower in Asian trade Wednesday on the eve of an OPEC ministerial meeting in Vienna to discuss production quotas, analysts said.

The oil markets were also under pressure from growing worries over the economic crisis in Europe despite a massive bailout package of 100 billion euros ($125 billion) to rescue Spain’s ailing banking sector, they said.

New York’s main contract, light sweet crude for delivery in July, sank 68 cents to $82.64 a barrel and Brent North Sea crude for July delivery fell 28 cents to $96.86 a barrel.

“Pessimism in Europe continues to grow… with fears that a worsening in conditions will further reduce the already-weak European oil demand,” said Sanjeev Gupta, Ernst and Young’s regional head of oil and gas practice.

The OPEC ministerial meeting Thursday will be widely watched as kingpin Saudi Arabia’s call for existing output levels to be raised appeared to be facing opposition from other members including Venezuela.

Dow Jones Newswires quoted Venezuelan oil minister Rafael Ramirez as saying that “some countries in the Gulf have an over-production. We are going to discuss that.

“It will have to be reduced… We estimate that we have an over-production of 3.0 million barrels a day” above the ceiling of 30 mbpd that was decided in December, Ramirez said.

The 12-member cartel, which pumps about one third of the world’s crude supplies, left its 2012 world oil demand outlook almost unchanged on Tuesday, citing price volatility and pressure on the global economy.