Oil prices resume decline after Middle East producers say they will maintain output

Saudi Oil Minister Ali al-Naimi (centre) with United Arab Emirates Energy Minister Suhail  al-Mazrouei (right) during the opening session of the 10th Arab Energy Conference in Abu Dhabi on Dec 21, 2014. Mr Naimi, the de facto leader of the Organ
Saudi Oil Minister Ali al-Naimi (centre) with United Arab Emirates Energy Minister Suhail  al-Mazrouei (right) during the opening session of the 10th Arab Energy Conference in Abu Dhabi on Dec 21, 2014. Mr Naimi, the de facto leader of the Organisation of the Petroleum Exporting Countries, and others said Opec made the right decision in November when it decided not to cut output. -- PHOTO: AFP

NEW YORK (AFP) - World oil prices Monday resumed their downward trajectory following comments from key Middle Eastern oil producers that they have no plans to cut output.

US benchmark West Texas Intermediate for delivery in February dropped US$1.87 to US$55.26 a barrel on the New York Mercantile Exchange.

European benchmark Brent oil for February delivery fell US$1.27 to US$60.11 a barrel in London.

Monday's trade marked a return to the dominant downward trend in the oil market following a brief rally Friday.

Appearing at an energy conference in Abu Dhabi Sunday, leading Middle Eastern producers held firm against any moves to cut production to boost crude prices.

"If they (non-Opec countries) want to cut production they are welcome. We are not going to cut, certainly Saudi Arabia is not going to cut," Saudi Oil Minister Ali al-Naimi told reporters.

Mr Naimi, the de facto leader of the Organisation of the Petroleum Exporting Countries, and others said Opec made the right decision in November when it decided not to cut output. Oil prices have lost about 50 per cent of their value since June.

United Arab Emirates Energy Minister Suhail al-Mazrouei was emphatic that Opec, which pumps a third of global crude supplies, will not make any move soon to shore up the market.

"We will not interfere with market fundamentals and do something that is a short fix," he said.

"We need at least six months" to assess the market and "even if nothing happens when we meet after six months, we will not change our position," Mr Mazrouei added.

The remarks from the Saudis and others were a "bearish" drag on oil prices, said Mr Michael Lynch, head of the Strategic Energy & Economic Research consultancy.

"The market is at a place where they're looking for some kind of reaction from some producers and this is a bearish sign that the Saudis are so resistant," Mr Lynch said.