Tuesday May 26, 01:23 PM
Oil prices slip under $60
LONDON (AFP) - World oil prices fell under 60 dollars per barrel on Tuesday, pressured by the strengthening US currency and weaker European equities, as traders awaited this week's crucial OPEC output meeting.
New York's main futures contract, light sweet crude for delivery in July, retreated 1.88 dollars to 59.79 dollars a barrel.
London's Brent North Sea crude for July lost 1.34 dollars to 58.87 dollars per barrel.
Dealers said oil was pulled lower as the US currency strengthened against the euro. A stronger greenback dents demand for dollar-priced crude which becomes more expensive for buyers holding weaker currencies.
At the same time, Europe's main stock markets sank on Tuesday as investors digested the bleak global economic outlook amid jitters over North Korea's nuclear test.
"Oil prices are likely to trade within a range of 57-61 dollars this week," said analysts at the John Hall Associates energy consultancy.
"The main event is the meeting of OPEC ministers in Vienna on Thursday to review the market and determine strategy for the coming quarter.
"With prices trading at around the 60-dollar mark it is likely that OPEC will keep production quotas unchanged and call for renewed compliance with existing cuts."
The Organization of the Petroleum Exporting Countries (OPEC), which pumps some 40 percent of the world's oil supply, has steadily reduced production since late last year in a bid to support prices.
King Abdullah of OPEC powerhouse Saudi Arabia said in remarks published on Tuesday that a fair price for oil was between 75 and 80 dollars.
"We still believe that a fair price is 75 dollars and perhaps 80 dollars a barrel, especially now," the king said in an interview with Kuwaiti daily Assiyassa.
King Abdullah -- whose country is the world's top oil exporter -- also said that prices, which have dropped sharply due to the global economic downturn, will eventually stabilise at a higher range when the world economy recovers.
"The issue of fluctuating prices is governed by developments and conditions of the world markets. These (prices) are bound to stabilise at a higher price for oil in the future," he said.
Oil prices have tumbled from record peaks of more than 147 dollars per barrel in July to about 32 dollars in December as demand slumped due to the global economic crisis -- but prices have since risen gradually.
Other analysts said investors were watching the impact of escalating unrest in Nigeria.
"With the recent rebound of oil prices and of Nigerian disruption, OPEC cannot announce a new cut," said PetroMatrix analys Olivier Jakob.
The country's main rebel group on Monday destroyed several major oil pipelines in the south in response to a military offensive, prompting a cut in production announced at 100,000 barrels a day.
The Movement for the Emancipation of the Niger Delta (MEND) said it had put "out of operation" a major Chevron (NYSE: CVX - news) oil storage facility by destroying the pipelines and flow stations that feed it.
The US oil giant confirmed an attack on one of its pipelines in the Abiteye area of Delta State.
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