Oil prices fell back below 26 dollars a barrel here on Tuesday when forecasts of a cold Christmas in much of the United States were overshadowed by mounting concerns of an OPEC production cut in the New Year.
Benchmark Brent North Sea crude for delivery in February eased to 25.81 dollars a barrel in early deals, from 26.24 dollars at the close on Monday.
In New York, the reference light sweet crude January contract was selling for 29.47 dollars a barrel, from 29.76 dollars at the close on Monday.
Oil prices had found their feet again in recent days amid expectations that demand could surge due to a promised US cold snap.
But much of the recent gains have been wiped out by a cascade of predictions that the Organization of Petroleum Exporting Countries will decide to tighten its taps when it meets early next year.
Indeed, a number of OPEC member countries have already called for a lowering of production quotas at the January 17 meeting in Vienna.
Libya, Iran and Kuwait have all called for cuts to stop prices falling further, with some suggesting that one million barrels a day less oil would stop the price slump in its tracks.
Iraq, which has been stalling on exports this month amid a row with the United Nations over its oil-for-food program, weighed into the debate on Tuesday, urging OPEC to "take measures to counter the current fall in prices by cutting production to soak up the losses of the organization’s member countries."
This has been enough to rein in prices that were beginning to rebound on forecasts of a blast of cold weather in the US Northeast at the weekend.
"Temperatures across much of central and eastern Europe are also expected to turn very cold over the next few days, which could provide some pre-holiday gas oil demand," the GNI brokerage said.
With question marks hanging over future supply, analysts were watching closely for the latest snapshot of US reserves, which the American Petroleum Institute (API) renders every Tuesday.
Stocks dwindled to 24-year low points earlier in the autumn, but have held firm since, mitigating fears of a supply crunch -- LONDON (AFP)
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