Oil prices fell towards 32 dollars a barrel on Friday as Saudi Arabia prepared to host a major forum of producers and consumers seeking a fair range for crude after months of sky-high prices.
A barrel of the benchmark North Sea Brent crude for January delivery was going for 32.28 dollars after closing at 32.77 dollars on Thursday. In New York, light sweet crude for December delivery fell 46 cents to 35.12 dollars on Thursday.
Investors were continuing to take profits after a recent spike in prices caused by cold weather in the northern hemisphere, strong demand and scant signs from oil exporters of an increase in output to cool the feverish market.
After last weekend's conference of the Organization of Petroleum Exporting Countries (OPEC) in Vienna, at which ministers ignored calls for further output hikes, the focus was turning to the Riyadh conference in the hope of some form of commitment to a lower oil price.
Saudi Oil Minister Ali Al-Nuaimi said the aim was to reach "an understanding on a price range" after more than three months of crude prices above 30 dollars a barrel.
But he added that OPEC was not ready to increase output again, after raising production four times this year to add almost four million barrels a day to the market.
Oil exporters now fear that the output hikes will result in a market glut next year, bringing prices crashing down. They blame taxation in consumer countries and market speculation for high fuel prices.
Oil importing nations for their part fear the high prices will trigger inflation and recession, much as they did in the mid-1970s.
"I think both producers and consumers think this is not a desirable level of price," said Robert Priddle, executive director of the Paris-based International Energy Agency.
"It's too high and it will damage the world economy and in time damage the interests of oil producers," he said -- LONDON (AFP)
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