Crude oil was little changed as OPEC and non-OPEC producers prepared for a Monday meeting in Vienna to discuss production levels, after a 28 percent drop in prices since the Sept. 11 terrorist attacks.
Seven non-members, including Mexico, Norway and Russia, will participate in the talks. Some OPEC nations have called for an output cut that would include non-OPEC oil. OPEC has cut its quotas by 13 percent this year to boost prices as demand weakened.
An economic slowdown has worsened since Sept. 11, analysts said.
"We're getting the feeling that the lack of demand due to the global economic scenario will overwhelm any OPEC cuts," said Paul Zubulake, a broker at Refco Inc. in New York. "All the fundamentals now are bearish except for the possible production cuts."
Crude oil for December delivery rose US$0.02 to US$22.03 a barrel on the New York Mercantile Exchange. Prices fell 1 percent this week and are down 35 percent from a year ago.
In London, Brent crude oil for December settlement rose US$0.01 to US$21.02 a barrel on the International Petroleum Exchange.
OPEC's oil price index has been stuck below the group's US$22 to US$28-a-barrel target range for a month. It was quoted at US$18.97 a barrel yesterday, down from US$26.43 on Sept. 11.
The 10 members of OPEC with production quotas, all except Iraq, lowered their daily production targets by 3.5 million barrels, or 13 percent, this year.
Their actual output exceeded those quotas by 1.3 million barrels a day last month, according to Bloomberg estimates, and by 850,000 barrels daily so far this month, according to PetroLogistics Ltd, which tracks oil shipments.
A worsening economic outlook is keeping speculators from betting on rising prices. As of Oct. 16, investors in New York had sold a net 48,728 contracts -- equivalent to 48.7 million barrels -- of crude oil, the US Commodities Futures Trading Commission reported.
The UK economy grew by a greater-than-expected 0.6 percent in the third quarter, according to National Statistics. The world's fourth-largest economy will have the fastest growth among the G7 nations this year and next, according to the International Monetary Fund.
The US economy probably shrank 0.5 percent in the third quarter and may contract another 1 percent in the current quarter, economists surveyed by Bloomberg News said. The US is the biggest energy consumer.
Japan, the second-largest oil consumer, is in its fourth recession in a decade.
Iraq may have violated UN sanctions when, on two separate occasions, it loaded crude oil worth a total of US$10 million onto a tanker after UN inspectors left, according to a letter from the tanker's captain.
It was the first time Iraq has been accused of such a violation of sanctions, Hasmik Egian, spokeswoman for the UN office, said yesterday. Iraq had previously been accused of collecting hidden fees for its oil by under-reporting the prices it charges customers.
Exports from Iraq, which normally pumps about 3 percent of the world's oil, are controlled by the UN under sanctions imposed after its 1990 invasion of Kuwait.
The current six-month phase of the UN's agreement with Iraq ends on Nov. 30. When the previous agreement expired in early June, Iraq suspended exports for five weeks.
Saudi Arabia, the biggest oil producer and exporter, supported the US and its allies in their 1990 war against Iraq, and has pledged to make up any oil shortfall during past Iraqi disruptions.
"Saudi Arabia might be waiting to see how the Iraqi situation is resolved before deciding on what to do about quotas," said Chester Irvin, a broker at ABN Amro Inc in New York. "The Saudis don't want prices to crash, but they also don't want them to rise a lot either, which could result if Iraq stops exports."
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