LONDON -- World oil prices fell on Monday, holding under 89 dollars a barrel, as traders looked ahead to this week's crucial production meeting of crude producers' group OPEC.
New York's main contract, light sweet crude for January delivery, sank 35 cents to 88.36 dollars per barrel.
Brent North Sea crude for January slid 16 cents to 88.10 dollars.
Last week, prices had plunged on speculation that OPEC might ramp up production, analysts said. The sharp drop came despite an explosion on a key pipeline linking Canada with the United States.
"There is still quite a bit of uncertainty as to what OPEC will do on Wednesday when they meet in Abu Dhabi but the market has already priced in an expected boost in production," said Victor Shum of energy consultancy Purvin and Gertz.
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With prices now off their record peaks, the pressure on OPEC to raise its output has eased considerably, according to Shum.
OPEC ministers were due to start arriving in Abu Dhabi on Monday to decide whether the 13-member organisation would boost oil supplies or leave production unchanged.
The cartel is concerned that raising output could oversupply the market, further dampening prices which have dropped below 90 dollars in recent days.
But leaving output quotas unchanged on Wednesday could send oil prices to fresh record highs and even above the psychological 100-dollar-a-barrel mark for the first time, analysts have said.
The OPEC oil cartel is a key player in the energy market because it produces about 40 percent of the world's crude.
© AFP 2007
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