NEW YORK (AFP) - World crude prices slumped more than two dollars after Saudi Oil Minister Ali al-Nuaimi said the OPEC cartel might not have to cut output next month.
New York's main oil futures contract, light sweet crude for delivery in March, shed 2.08 dollars to close at 57.81 dollars a barrel.
In London, the price of Brent North Sea crude for March delivery sank 2.41 dollars to 56.60 dollars a barrel.
"Prices are sharply lower today after failing to stay over 60 dollars last week," said AG Edwards analyst Bill O'Grady.
"Comments from Saudi Oil Minister Nuaimi suggesting the oil market is balanced -- and further cuts would not be necessary -- (are) somewhat bearish."
In an interview published Monday, Ali al-Nuaimi told the Wall Street Journal: "If you are asking me are we going to take additional cuts or increase supply, I do not know.
"But, most probably if the trend is like what it is like today, with the market getting in much, much better health and balance, there may not be any reason to change."
Edwards added that the comments suggested Nuaimi was comfortable with oil customers racking up their crude reserves later this year.
The Organization of the Petroleum Exporting Countries (OPEC), whose members produce about 40 percent of the world's oil, is to hold its next official meeting on March 15.
As the world's biggest producer of crude, Saudi Arabia is viewed as OPEC's most influential member.
"If OPEC fails to cut production again in March there is going to be growing concern the market will be faced with a supply glut in the second quarter, when demand tends to soften," Fimat analyst John Kilduff said.
"Saudi Arabia's oil minister seemingly satisfied with current market conditions can only contribute to waning confidence," he said.
Barclays Capital analyst Kevin Norrish said that another factor in Monday's slump was the possible restart of one of the largest oil fields in California following a fire last week.
"Also weighing on prices was news that Occidental Petroleum was planning to resume production at its 120,000 (barrels per day, bpd) Elk Hills field within a few days," Norrish said.
At its last meeting in December, OPEC decided to cut production by 500,000 bpd from February 1, following a reduction of 1.2 million bpd in November.
OPEC moved to cut output in recent months in a bid to support prices, which have tumbled from record highs above 78 dollars a barrel struck in mid-2006.
But despite the cuts prices continued to fall, striking a 20-month low in January of 49.90 dollars in New York. Oil futures were pushed down by rising stockpiles but have since rebounded.
They breached the 60 dollar mark late last week on concerns over a current cold snap in the United States, dealers said.
The United States is the world's biggest energy consumer, and rising demand for heating fuel during an unusually cold late winter has been a key factor driving prices upwards.
But Kilduff said: "Renewed uncertainty over OPEC's willingness to cut production and steps being taken to defuse the political crisis with Iran certainly takes away from a motivation to keep buying past 60."
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