Oil prices near $100 a barrel

Oil prices slid towards the $100 (€70) a barrel mark today amid signs that production cartel Opec was planning to keep supply levels steady.

Opec members including Saudi Arabia and Iran are holding their regular six-monthly meeting in Vienna, with analysts expecting the organisation to maintain a production target of 29.673 million barrels per day.

Light, sweet crude traded on New York Mercantile Exchange – the world’s benchmark crude price – was trading at $105 (€74) a barrel after dipping slightly below that earlier in the session. Prices were last as low in April.

And Brent crude also dropped as low as $101.27 (€71) a barrel on the ICE commodities exchange in London, the lowest price since the start of April.

Saudi Arabia, which accounts for around a third of Opec output, signalled before today’s meeting that it was happy with the current oil situation.

Oil minister Ali Naimi told reporters in Vienna: “The market is fairly well balanced. I think things are in balance, in a healthy position.”

But Iran’s oil chief, Gholam Hossein Nozari, suggested otherwise after telling the media: “We believe the market is oversupplied.”

Oil prices have fallen nearly 30% from the $147 (€103) high seen in July as projections of slower global economic growth has dampened demand.

Last month the International Energy Agency forecast that OECD oil demand would contract to 48.6 million barrels per day this year and then fall to 48 million in 2009.

Petrol prices on UK forecourts have not fallen as quickly, with average unleaded petrol down from July’s peak of 119.7p to 112.7p at the weekend – a drop of nearly 6%. Average diesel prices have fallen from 133.3p to 124.1p, just under 7%.

The AA said it takes around four to six weeks for oil price changes to filter through to forecourt pumps.

OPEC nations have around two-thirds of the world’s known oil reserves, and account for 40% of the world’s oil production. Other members include Iraq, Venezuela and Indonesia.