World oil prices slide on fresh eurozone worries

World oil prices sank as investors fretted over weaknesses and unanswered questions in last week’s deal to rescue the eurozone and shore up the European economy.

Traders were meanwhile eagerly awaiting this week’s output meeting of the Organisation of Petroleum Exporting Countries (OPEC), the cartel which pumps about one-third of the world’s oil.

In New York the main contract, West Texas Intermediate crude for January delivery, dipped $1.64 from Friday’s level to $97.77.

In London, Brent North Sea crude for January was unchanged at $108.62.

Prices softened as economists and market analysts cast doubts over whether the European Union summit on Friday produced a fiscal discipline pact strong enough to end the crisis and help restore growth.

“It’s always the same story,” said Tom Bentz of BNP Paribas.

“Friday the market rallied after the European deal... and then people took a step back looking what really came out with the meeting and I think there were some disappointments.

“We’re not out of the woods yet, and the euro fell today again,” he added.

Meanwhile eyes were on the coming meeting of OPEC oil ministers in Vienna on Wednesday, which will set the cartel’s production goals. OPEC production hit its highest level in three years in November — 27.94 million barrel a day — 800,000 barrels higher than the previous month, according to the Middle East Economic Survey.

“OPEC is lowering its demand expectations for the world by about 100,000 barrels of oil per day. Now the question is whether they have the ability to lower production by the same,” said Phil Flynn of PFG Best. Crude prices were mixed in Asia.

New York’s main contract, light sweet crude for delivery in January, was up eight cents to $97.85 a barrel. Brent North Sea crude for January delivery shed six cents to $107.20.

An EU deal last week on closer economic coordination between member states failed to reassure traders that an end to the eurozone crisis was in sight, Phillip Futures said in a report.

“A European summit agreement last week to strengthen budget discipline in the eurozone failed to restore financial market confidence,” it stated.

“Crude oil prices... (were) pressured by concerns that Europe’s agreement on closer fiscal union will not solve its debt crisis and might deepen a regional slowdown,” the report added.

Markets were watching for Wednesday’s output meeting of the Organisation of the Petroleum Exporting Countries (OPEC), the cartel which pumps about one-third of the world’s oil, for indications on its production goals.-AFP