Oil lower ahead of OPEC meeting

SINGAPORE – Oil was lower in Asian trade Wednesday, dampened by demand worries as the eurozone debt crisis showed no signs of improving, analysts said.

Investors are also awaiting the outcome of an Organization of the Petroleum Exporting Countries (OPEC) meeting due to take place later in Vienna although most expect the oil cartel to announce it will stick to existing production targets.

New York’s main contract, light sweet crude for January delivery, fell 31 cents to $99.83 a barrel and Brent North Sea crude for January delivery was off 34 cents at $109.16.

“Broader macroeconomic concerns about the eurozone continued to drag oil prices lower,” analysts from Barclays Capital said in a commentary.

“The key focus of the market currently is the OPEC meeting in Vienna… where the group meets against a complex economic, fundamental and political backdrop.

“Oil market balances have softened since the previous meeting, and the geopolitical context has deepened.”

Analysts widely expect the OPEC, which supplies a third of the world’s crude, to maintain its official output target of 24.84 million barrels per day — where it has stood for almost three years.

But with the International Energy Agency estimating that actual OPEC production hit 30.68 million barrels of oil per day in November — the highest amount in more than three years — the cartel may decide to issue a statement promising stricter compliance with its quotas.

“We will have the meeting, and then we will decide” what to do regarding output quotas, Iran’s oil minister Rostam Qasemi said on arriving in Vienna on Tuesday.

“Whatever the decision will be, it will be made all together,” he added.

The 12-nation cartel based in Vienna meets periodically to set production levels, hoping that its decisions result in favourable market oil prices for its dozen members, which also include Libya, Nigeria and Venezuela.