Oil falls below $99 ahead of OPEC meeting

Associated Press

SINGAPORE — Oil prices fell below $99 a barrel Monday in Asia as traders looked to this week’s OPEC meeting for clues about the cartel’s future crude output.

Benchmark crude for January delivery was down 79 cents to $98.62 a barrel in midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.07 to settle at $99.41 on Friday.

In London, Brent crude fell 70 cents at $107.92 on the ICE futures exchange.

The Organization of Petroleum Exporting Countries meets Wednesday in Vienna, and analysts will be closely watching whether the 12-nation group can agree on production policy. At OPEC’s last meeting in June, members failed to reach consensus and output quotas were left unchanged.

However, the International Energy Agency estimates OPEC produces about 10 percent more than its official quotas. Cheating on quotas and Middle East upheavals and rivalries threaten to crack OPEC unity, which could lead to more crude on the market, analysts said.

“We can see that OPEC quotas mean absolutely nothing,” energy analyst and trader Blue Ocean Brokerage said in a report. “Another year of political unrest in the Middle East and it will be every barrel for themselves.”

Crude has jumped from $75 in October after the U.S. economy has shown signs of better than expected economic growth in recent months. Analysts expect global economy growth to slow next year, which would likely undermine crude demand.

In other energy trading on the Nymex, natural gas dropped 6.9 cents to $3.25 per 1,000 cubic feet. Heating oil fell 0.9 cents to $2.90 a gallon and gasoline futures slid 0.4 cent to $2.59 a gallon.