After topping US$50/barrel, oil prices drop by 10%

16-Dec-08

After briefly topping US$50 a barrel, oil prices dipped by almost five dollars on Monday, despite threats of production cuts from OPEC. After postponing a decision to reduce output earlier this month, OPEC members are scheduled to meet this week in Algeria. Few members are keen to cut production by 2 mln bpd - about 5% of Opec production to boost prices, which have slumped from a peak of US$147 a barrel in July. Opec's biggest previous cut in production was in April 1999 when it cut production by 1,716,000 barrels per day (bpd). At a meeting in Austria in October, OPEC cut 1.5 mln bpd, but prices continued falling regardless, and hit a four-year low of $40.50 a barrel on 5 December.