SINGAPORE, (AP) -Crude oil prices slid Monday as the market gauged OPEC nations’ cohesion in oil cuts and noted ample winter supplies because of mild autumn weather.
An increase in supply from non-OPEC countries has also eased prices in the January contract that started trading Monday, said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.
Light sweet crude for January delivery was down 59 cents to $58.38 a barrel in midafternoon Asian electronic trading on the New York Mercantile Exchange. January Brent at London’s ICE Futures exchange was down 68 cents to $58.31 a barrel.
On Friday, the December light sweet crude contract closed at $55.81 a barrel. It was the lowest settlement for the front-month crude contract since June 15, 2005.
“The concern for the market is how real is the cutback in OPEC supply, the rising growth in supply from non-OPEC nations and the fact that winter weather in the northern hemisphere has not turned cold,” Shum said.
“Going forward, I think weather will remain a wild card,” he said. “Also, in less than a month’s time, OPEC will meet again, and there is already talk of further cuts, which has underpinned prices.”
The Organization of Petroleum Exporting Countries, which is scheduled to meet in Nigeria next month, announced an output cut of 1.2 million barrels a day last month. But traders have been skeptical that the Vienna-based cartel will stick to its pledge at a time of historically high prices.
OPEC meets Dec. 14 in Abuja, Nigeria.
In other Nymex trading, heating oil futures dropped 1.17 cent to $1.6572 a gallon, while gasoline futures fell 1.36 cent to $1.5275 a gallon. Natural gas futures were down 12.9 cents to $8.050 per 1,000 cubic feet.