Oil near $69 as OPEC signals no output cut

AP News
Posted: Dec 14, 2009 3:11 AM

Oil prices fell to near $69 a barrel Monday in Asia amid signs OPEC doesn't plan to cut crude output when it meets next week.

Benchmark crude for January delivery was down 56 cents at $69.31 at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange after falling as low as $68.59. On Friday, the contract gave up 67 cents to settle at $69.87.

Kuwait's oil minister Sheik Ahmed al-Abdullah al-Sabah told state news agency KUNA on Sunday that the 12-member Organization of the Petroleum Exporting Countries probably won't change its production levels at its next meeting in Angola on Dec. 22.

Oil prices have slid from $82 in October on investor concern crude demand in the U.S. isn't rebounding despite an overall economic recovery.

A strengthening dollar is also helping to push crude prices down. Investors often buy crude as a hedge against inflation if the dollar weakens, and sell when the dollar is stronger.

The euro rose to $1.4669 in Asian trading Monday from $1.4624 on Friday while the dollar slipped to 88.74 yen from 88.95.

"A further weakening in the euro to the $1.44 to $1.45 area is likely and such a development could contribute to some further slippage of at least $1 to $2 per barrel," Galena Illinois-based Ritterbusch and Associates said in a report.

In other Nymex trading in January contracts, heating oil rose 1.20 cents to $1.91 while gasoline gained 1.61 cents to $1.85. Natural gas fell 12.8 cents to $5.29 per 1,000 cubic feet.

In London, Brent crude for January delivery dropped 16 cents to $71.72 on the ICE Futures exchange.