Crude oil prices head lower

LONDON (AFP) - World oil prices fell as traders discounted
OPEC' name=c1> SEARCHNews News Photos Images Web' name=c3> OPEC's recent output cut in the face of healthy crude reserves in the United States, which is the world's biggest energy consumer.
New York's main contract, light sweet crude for delivery in December, shed 83 cents to 58.50 dollars per barrel in pit trading Monday.
In London, Brent North Sea crude for December delivery shed 61 cents to 59.07 dollars per barrel in electronic deals.
"Crude futures were lower (on Monday), heading below 59 dollars a barrel, remaining under pressure from doubts that OPEC's will actually deliver production cuts agreed on Friday," Sucden analyst Michael Davies said.
Last week, the Organization of the Petroleum Exporting Countries said it would reduce its output by 1.2 million barrels per day (bpd) to try to hold up prices, which have tumbled from records above 78 dollars set in July and August.
The reduction was 200,000 barrels more than market expectations, but analysts remain sceptical over the impact of the decision.
"There is sufficient crude oil inventory ... even if OPEC cuts production, it will not have a significant impact on the market," said Tetsu Emori, the chief commodities strategist at Mitsui Bussan Futures in Tokyo.
"The market seriously thinks even if OPEC cuts production ... the fundamental demand and supply balance is not getting tighter."
Blaming an over-supplied market, oil ministers from the 11-member cartel had said on Friday that the reduction would take effect from November 1.
The cut will reduce actual production to 26.3 million bpd from 27.5 million bpd currently, which is below OPEC's official quota of 28 million bpd, in place since July 2005.
However, the Centre for Global Energy Studies said Monday that the actual reduction would be "significantly less" than the 1.2 million bpd.
"The CGES believes the actual reduction in OPEC output over the remainder of 2006 will be significantly less than the 1.2 mbpd agreed in Doha," the influential research body said in its monthly oil report.
"Experience suggests that implementation of the Doha agreement may well prove problematic, particularly as individual starting points for the cuts remain unclear."
Oil prices have tumbled in recent months due to rising global supplies, a largely uneventful Atlantic hurricane season and concerns over the impact of slowing US economic growth on oil demand.
Analysts said that those concerns have overshadowed the OPEC output cuts and have even made some market players view them as proof that the cartel itself is worried about slowing demand growth.
But BNP Paribas analysts said they believed that the OPEC cuts would support prices in November or early December as they start to be felt in the United States at a time when fuel demand increases as winter temperatures set in.