Oil falls ahead of Opec meeting

Oil is far below the record of $147 a barrel reached in July

Opec ministers will gather in Cairo on Saturday, as oil prices remained below $55 a barrel amid fears that global demand is set to fall further.

US light, sweet crude ended down a cent at $54.43 a barrel on Friday. In London Brent was up 20 cents at $53.49.

Ministers from Iran and Qatar dampened expectations that a cut in production would be announced this weekend.

Opec member Venezuela favours a cut in output of a million barrels a day to try to boost prices.

The Iranian Oil minister, Gholam Hossein Nozari said a cut may be announced at the Opec meeting in Algeria on 17 December.

"Here we will prepare some data and maybe the final decision will be in Algeria," he said.

His view was backed up by the Qatari energy minister, Abdullah al-Attiyah.

Added Kuwaiti Oil Minister Mohammed al-Olaim said:"I don't think a decision will be taken at the meeting in Cairo. A decision could be taken at the meeting in Algeria."

Balancing demand

Falls in demand in the US, the world's top energy consumer, and other industrialised countries, have helped drive prices down from a record peak of more than $147 a barrel.

Opec, which accounts for 40% of global oil production, cut output by 1.5 million barrels a day last month, but the move failed to stop prices from declining.

While cartel members have not ruled out making another output cut, some say the impact of the existing cuts still have to be felt.

"Combined with weakening non-Opec supplies, the projected...output curtailment suggests that the oil market could actually tighten moving into 2009," Barclays Capital said in a research note.