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Oil steadied below US$62 a barrel on Monday as traders weighed high inventories and mixed signals over whether Opec will curb crude output for a second time this year at a meeting this week.
A slim majority in Opec want to cut the group's output further at Thursday's
meeting, a top Opec official told Reuters. Saudi-owned Al Hayat newspaper quoted Opec sources as saying the group would keep supply unchanged.
"I see mixed signals," Hasan Qabazard, Opec's director of research, told Reuters. "Some ministers believe there should be cuts but some other ministers believe the market is balanced."
US crude slipped 29 cents to US$61.74 a barrel at 1620 GMT. London Brent fell two cents to US$62.19.
The Organisation of the Petroleum Exporting Countries agreed to lower output by 1.2 million barrels a day from Nov. 1 to stem a slide in prices from a peak of US$78.40 hit in July.
According to a Reuters survey, the group that pumps more than a third of the world's oil has made about 730,000 bpd of the promised cutback, Opec's first in two years.
On Friday, Opec President Edmund Daukoru said he favoured a further cut to counter ample inventories, particularly in top oil consumer the United States.
In the United States, crude oil inventories are at the highest level for this time of year since 1993. Opec meets on Thursday in Abuja, Nigeria.
Some analysts say an additional cutback is not needed just as world oil demand is heading towards its seasonal peak during the Northern Hemisphere winter.
"I don't think Opec needs to cut any further because of winter demand and the impact of cuts they have already made," Mike Wittner, analyst at investment bank Calyon, said.
Even so, Saudi Arabia has told oil refiners in Asia that it will reduce their supplies next month.
State oil firm Saudi Aramco told Japanese, South Korean and Taiwanese refiners that it will cut January supplies to 8 to 9 per cent below their contracted annual volumes, deeper than the curbs imposed in December.
About half of the kingdom's 7 million bpd of crude exports move to Asia. The world's largest oil exporter kept supplies to European refiners mostly steady, traders said.
- REUTERS
