Oil steady as Opec cuts kick in

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

Oil prices were barely changed on Wednesday, as agreed production cuts by members of the Opec oil producers' cartel came into effect.

Although Opec's 1.2 million barrels per day cut started on 1 November, analysts said doubts remain over compliance by a number of the group's 11 nations.

US crude finsihed down 2 cents to $58.71 a barrel while London's Brent lost 5 cents to $58.98.

Global oil prices have fallen 20% since hitting record highs in July.

Then oil markets were worried by the conflict in southern Lebanon between Hezbollah militants and the Israeli army.

Further production cuts?

Led by Saudi Arabia, Opec members agreed to cut production last month in an attempt to shore up prices.

However, doubts have remained over whether all Opec members will implement the cuts as some may wish to avoid seeing revenues fall in the short term.

Oil analyst Makoto Takeda of Bansei Securities, said he expected oil prices to eventually return above $60 a barrel.

"It's unlikely that we'll see full implementation, but that's not important because the Saudis have committed to their reduction," he said.

"There is a likelihood of a further cut in December, so traders are nervous about selling further."

On Wednesday, Venezuela's oil minister Rafael Ramirez said that his government would call for an further cut in oil production when OPEC members meet in December.