OPEC may decide on production curbs at tomorrow’s meet

The Organisation of Petroleum Exporting Countries (OPEC) looks set for a compromise decision on trimming production and supply of oil, as the OPEC basket of crude fell to a low of $74.28 a barrel.

The price of the OPEC basket of twelve varieties of crude stood at $74.28 a barrel on Tuesday, compared with $75.70 the previous day, according to OPEC Secretariat calculations.

The new OPEC Reference Basket of Crudes (ORB) is made up of the Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).

Yet, as the producer group prepares for one of its most closely-watched meetings in years on Thursday, there was some discord with leader Saudi Arabia wanting the group to adhere more closely to self-imposed production ceiling, reports quoting Gulf officials said.

With oil prices ruling at around $75 a barrel following a 35-per cent slide since the summer, some within OPEC have felt a less urgent need for the group to take stronger action.

But as late as last week the Saudis' likely approach at Thursday's meeting was unclear to most members.

The oil markets might have already priced in this news, meanwhile oil stocks may have already bottomed out.

Political factors could be behind the lack of willingness to cut production, and if so, may only be temporary.

The market is looking at a couple of factors that investors were looking forward to this week, including the deadline set for Iran to reach a deal with the US and other Western powers.

If a deal was not reached and the talks ended without another extension, this could have caused oil prices to move higher on heightened speculation that Israel might act alone and bomb Iran's nuclear facilities just as it did to Iraq many years ago.

Crude-oil futures were weak in Asian trade today after sharp overnight losses and traders said large price swings will continue as markets lap up news headlines in the run up to OPEC's meeting in Vienna on Thursday.

On the New York Mercantile Exchange, light, sweet crude futures for January delivery traded flat at $74.09 a barrel in the Globex electronic session.

January Brent crude on London's ICE Futures exchange rose $0.06 to $78.39 a barrel.

Nymex WTI crude settled at its lowest value since 21 September 2010 in the previous trading session after reports that oil producers Saudi Arabia, Venezuela, Mexico and Russia had met but didn't decide on supply cuts.