Opec doubts drive oil to 2006 low

The trend of rising oil prices has been reversed in recent weeks

The price of oil sank to a 2006 low on Wednesday as producer cartel Opec could not agree on an output cut.

At the same time the International Energy Agency (IEA) cut its forecast for global oil demand growth in 2007.

US light sweet crude for delivery in November fell 93 cents to close at $57.59 a barrel after touching $57.48, its lowest since 27 December.

In London Brent North Sea crude slid 69 cents to $58.65 a barrel, after it had earlier hit its lowest since February.

'Prices pressurised'

The markets are waiting for producer group Opec to make a decision on cutting crude output.

Despite seeming agreement on the principle of a one million barrel per day output cut, a hold-up over thrashing out how and when to cut has held up a formal deal.

If 11-nation strong Opec goes ahead with its cut in November, as mooted, it would be its first in two-and-a-half years.

"Until we get an OPEC agreement finalized, the trend will continue to be one of prices getting pressured," said John Kilduff, senior vice-president, energy risk management, at Fimat USA.

Summer high

Meanwhile, the IEA cut its figure for global oil demand growth in 2007 by 90,000 bpd to 1.45 million bpd because of weaker expected US demand.

A surplus of oil stocks, coupled with reduced Middle East tensions, have seen oil fall from more than $78 in July.

Oil fell to below $60 a barrel last Friday - having hit a record high of $78.40 in mid-July when the conflict between Hezbollah and Israel intensified.

Prices had briefly rebounded on Monday after North Korea's testing of a nuclear weapon briefly rattled markets.