Oil prices drop on credit crisis turmoil

Oil prices sank Thursday, with worries about a global financial crisis overshadowing news of an emergency OPEC meeting next month to discuss its impact on oil demand, the AFP was quoted.

With prices far below record highs around 147 dollars in July, analysts said the Organization of the Petroleum Exporting Countries could cut output to defend prices.

New York's main contract, light sweet crude for delivery in November, fell 2.36 dollars to close at 86.59 dollars a barrel.

In London, Brent North Sea crude for November settled 1.70 dollars lower at 82.66 dollars.
The price of crude oil slid as nervous traders watched fresh falls on global equity markets amid the worst financial crisis in seven decades.

And on Friday, the price was continued to drop with Brent North Sea was trading below 80 dollar at the opening market.

OPEC said it would hold an emergency meeting in Vienna on November 18 to discuss "the global financial crisis, the world economic situation and the impacts on the oil market."

"The organization is concerned about the deteriorating economic conditions," said a statement from OPEC, whose 12 member nations pump around 40 percent of world oil supplies.
The cartel said the deepening financial turmoil that erupted in August 2007, stemming from a US subprime mortgage crisis, had spread to many regions across the globe and "created even more uncertainties for the world economy."
"The organization reiterates its determination to ensure that oil market fundamentals are kept in balance and market stability is maintained," it said.

"Falling prices have caught OPEC's attention," said Mike Fitzpatrick at MF Global.
"If prices continue to fall until then, pressure for an output cut will doubtless be very high. If prices begin to stabilize, a call for stricter compliance regime will probably be the outcome," he said.

Traders remained concerned that OPEC could slash output in November to battle slowing oil demand.
"Market participants are still very much concerned that demand will continue to dwindle as global economies continue to slow sharply," said Sucden analyst Nimit Khamar in London.
"However, increased expectations that OPEC may ... cut output is underpinning the market."
Oil prices briefly fell to one-year lows on Wednesday as slumping stock markets generated demand concerns in a cooling global economy.

The market also had ended lower as news of an unexpectedly sharp jump in US crude reserves signaled weaker demand in the United States, the world's largest energy consuming nation.
The Department of Energy said on Wednesday that US crude oil inventories had risen by 8.1 million barrels in the week that ended October 3, far more than market expectations of a 2.3-million-barrel gain.