Oil price falls below $92 as OPEC keeps output target steady amid growing supply

NEW YORK, N.Y. – The price of oil fell two per cent to its lowest level in a month after OPEC stuck to its current production target despite ample supplies of crude.

U.S. crude oil futures fell US$1.64 to close at $91.97 a barrel Friday in New York. Brent crude, the benchmark for many international oil varieties, fell $1.80 to close at $100.39 in London.

The Organization of the Petroleum Exporting Countries said Friday it would keep its official output target of 30 million barrels a day — one third of the world’s daily consumption — even though world oil supplies are abundant and some regions, including the majority of the European Union, are in recession.

At the end of a meeting at its headquarters in Vienna, OPEC said that steady prices in recent months showed that the market was “adequately supplied” and that no action was needed.

Oil prices have traded in a range between $88 and $98 per barrel through the first five months of the year. The average for the year is $94.01 per barrel, just 13 cents less than the 2012 average.

OPEC has been producing more oil than members agreed to, helping to boost global supplies. Analysts say that could lead to lower prices in the coming months.

“In view of the current oversupply and in the absence of any positive surprises from OPEC, oil prices are likely to remain under pressure,” said analysts at Commerzbank in Frankfurt.

Prices are also being pressured by weak economic outlooks around the world. When economies slow, drivers, shippers and travellers use less gasoline, diesel and jet fuel.

Unemployment in the 17 countries that use the euro rose to a record 12.2 per cent in April, according to data released Friday. The region is mired in its longest recession since the shared currency was introduced in 1999.

The U.S. economy, meanwhile, grew at a modest 2.4 per cent annual rate from January through March, slightly slower than initially estimated. That, teamed with higher oil production and the use of more fuel-efficient vehicles, has sent the nation’s oil supplies soaring.

The U.S. Energy Department said the nation’s supply of oil rose last week by three million barrels to 397.6 million barrels, the highest level since the government started collecting the data in 1978.

In other energy futures trading on the New York Mercantile Exchange:

— Wholesale gasoline fell five cents to close at $2.76 a gallon.

— Heating oil fell six cents to close at $2.78 per gallon.

— Natural gas fell four cents to close at $3.98 per 1,000 cubic feet.


Pablo Gorondi in Budapest and Pamela Sampson in Bangkok contributed to this report.