Oil prices extend losses ahead of OPEC meeting

Singapore: Oil prices extended losses in Asia as speculation swirls that the OPEC oil cartel will maintain output at this week's closely watched meeting despite a global supply glut. US benchmark West Texas Intermediate (WTI) for January delivery fell 24 cents to USD 73.85 while Brent crude for January eased 17 cents to USD 78.16 in mid-morning trade.

WTI dived USD 1.69 yesterday while Brent closed down USD1.35. "At the moment, the outcome of the OPEC meeting on Thursday is very much trumping all other factors," Daniel Ang, investment analyst at Phillip Futures in Singapore. "Prices have come under pressure after the meeting between some OPEC members and Russia saw no real concrete measures announced regarding production cuts," Ang said. Members of the Organization of Petroleum Exporting Countries and non-member producers including Russia held talks yesterday ahead of the cartel's key output meeting tomorrow.

After the meeting, Venezuelan Foreign Minister Rafael Ramirez said all parties agreed that the current price of crude ‘is not good’."We discussed the situation on the market, we shared our points of view and we agreed to keep in contact, and we will meet again in three months," he added. Separately, Russian oil giant Rosneft said it had trimmed output by 25,000 barrels partly in response to sliding prices.

The token reduction represented less than one percent of the behemoth's total and did little to boost energy prices on depressed global commodity markets. Tomorrow's meeting in Vienna of OPEC, whose dozen members together pump out about one-third of the world's crude, is its most significant in recent years.

The cartel is under pressure from its poorer members such as Venezuela and Ecuador to cut output after tumbling prices have slashed their precious revenues. Crude prices have sunk 30 per cent to four-year lows, since June on the back of plentiful supplies, a strong dollar and worries about stalling energy demand in a weak global economy.