Oil falls on Opec data

27 November 2007

Crude oil prices fell on Monday after it emerged some members of the Organisation of Petroleum Exporting Countries (Opec) may have increased output more than expected.

Opec agreed in September to increase production by 500,000 barrels a day from November 1st, but Victor Shum of Purvin & Gertz told Bloomberg he had seen signs of a much bigger rise.

"The shipping data indicates that increases may have been around 700,000 barrels per day in November. It's not unusual for members to produce beyond their target," said Mr Shum.

Iran's oil minister Gholam Hossein Nozari put more downward pressure on prices when he revealed he would support calls for a further increase in output at Opec's next meeting on December 5th, providing economic data indicated such a move was necessary.

As a result, the price of US crude dropped 48 cents to close at $97.70 (£47.22) a barrel on Monday, while London Brent crude slipped 44 cents to settle at $95.32.

However, cold weather in north America meant the price of heating oil futures actually rose slightly.