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LONDON - Oil eased below US$53 a barrel on Monday as investors balanced mild weather in the United States with the prospect exporter group Opec may lower supply further to boost prices.
Kuwait's oil minister said on Monday the Organisation of the Petroleum Exporting Countries may hold an
emergency meeting after Feb. 1 should prices fall further. Oil touched a 19-month low below US$52 last week.
"Even though it is only mid-January, at this point the markets have already written off the winter," said Mike Wittner, analyst at investment bank Calyon. "Market sentiment is firmly bearish."
US crude was down 16 cents at US$52.83 by 7am NZT. Brent crude for February, which expires on Tuesday, was up 11 cents at US$53.06.
Floor trading at the New York Mercantile Exchange is closed on Monday for Martin Luther King Jr. Day, but electronic markets remain open.
Oil's slide this year as mild weather in the United States curbed heating fuel demand is worrying for Opec, which has been cutting supply since November to stem crude's drop from a record high of US$78.40 hit in July.
The group pledged to lower supply by 1.2 million barrels per day from November 1. Meeting in Abuja, Nigeria, last month, Opec agreed to trim output by a further 500,000 bpd from February 1.
Kuwait's oil minister, Sheikh Ali al-Jarrah al-Sabah, said on Monday Opec may meet should prices fall further, though he preferred to wait until after the latest cutback took effect.
"We prefer to wait until Feb. 1 to see the impact of the Abuja decision and member states may meet after that if the step does not stabilise oil prices," he said.
Despite the Opec talk, oil could come under pressure this week as chart patterns look bearish, analysts said.
"Technically, there is little joy apparent for the bulls," Man Financial said in a report.
"We, therefore, may be in store for another down week this week, possibly briefly interrupted by an Opec announcement, but rallies should still be used as selling opportunities."
Investors were also betting prices would fall further.
Commodity Futures Trading Commission data on Friday showed that speculators on Nymex shifted to a net short position in crude oil in the week ended January 10.
It was the first time speculators were net short on crude since the week ending November 7.
- REUTERS