Oil markets focus on Opec meeting

Oil markets focus on Opec meeting

Oil prices have fallen about $10 in the past week

Oil prices are little changed ahead of Wednesday's summit of the oil producers' cartel, Opec in Abu Dhabi.

Delegates have been tight-lipped about whether there will be an increase in oil production to bring down prices.

But speculation remains that there could be an increase in production of 500,000 barrels per day.

US Light sweet crude fell 55 cents, or 0.6%, to $88.76 a barrel in New York, while a barrel of Brent crude dropped 30 cents, or 0.3%, to $88.95 in London.

Oil prices have dropped by about $10 in the past week on the widespread belief that there will be an increase in Opec production.

This is despite the fact that the official line from Opec remains that oil supplies are adequate to meet demand and that high prices are the fault of speculators.

But ironically, analysts said, the falling price may persuade Opec delegates that the increase in output is now unnecessary.

The price has also been depressed by a US intelligence report saying Iran halted its nuclear weapons programme four years ago, easing tensions.

"The fear of a unilateral strike on Iran has been an important component of the risk premium in crude oil," said Olivier Jakob from Petromatrix in Switzerland.