MELBOURNE (BLOOMBERG) - Oil extended its decline on Monday (Nov 23) as Venezuela predicted prices may drop as low as the mid-US$20s a barrel unless the Organisation of Petroleum Exporting Countries (Opec) takes action to stabilise the market.

January futures fell as much as 1.1 per cent in New York after front-month prices slid 0.9 per cent last week.

Saudi Arabia and Qatar are considering Venezuela's proposal for an equilibrium price of US$88 (S$124.50) a barrel, Venezuelan Oil Minister Eulogio Del Pino told reporters on Sunday in Tehran. Opec should make room for increased Iranian crude production within its ceiling of 30 million barrels a day, the nation's Oil Minister Bijan Namdar Zanganeh said.

Oil has slumped about 45 per cent the past year amid speculation a global glut with persist as Opec continues to pump above its collective quota. The 12-member group meets on Dec 4 in Vienna to discuss the production ceiling as Iran signals its intention to boost output by one million barrels a day within five to six months of economic sanctions being removed.

"Any meaningful change from Opec has to come from the big producers led by Saudi Arabia," Mr Ric Spooner, a chief analyst at CMC Markets in Sydney, said by phone. "While an increase in Iranian production is not a surprise, it will be a negative when it hits the market."

West Texas Intermediate for January delivery dropped as much as 47 cents to US$41.43 a barrel on the New York Mercantile Exchange and was at US$41.59 at 8.41am, Hong Kong time. The December contract expired on Friday after declining 0.4 per cent to close at US$40.39, the lowest settlement since Aug 26. The volume of all futures traded was about 43 per cent above the 100-day average.

Brent for January settlement was 10 cents lower at US$44.56 a barrel on the London-based ICE Futures Europe exchange. The contract rose 48 cents to US$44.66 on Friday. The European benchmark crude traded at a premium of US$3 to WTI.