Oil steady in Asia

Agence France-Presse

Posted at Feb 23 2009 11:20 AM | Updated as of Feb 23 2009 07:29 PM

SINGAPORE - Oil traded steadily near $40 in Asia on Monday despite an OPEC minister's forecast of additional output cuts by the cartel.

New York's main futures contract, light sweet crude for delivery in April, fell $0.06 to $39.97 a barrel on its first day of trade.

The March contract expired at the close of trade on the New York Mercantile Exchange Friday, down $0.54 at $38.94 a barrel.

Brent North Sea crude for April delivery shed four cents to $41.85.

"The market returned to a consolidated market... because of a lack of news," said Jonathan Kornafel, Asia director of Hudson Capital Energy, a trading firm.

He said weak global energy demand, counterbalanced by the Organisation of the Petroleum Exporting Countries' (OPEC's) production cuts, were the main factors affecting prices.

Algeria's minister for energy and mines said Sunday that OPEC will probably decide on more cutbacks in output in a bid to prevent further price drops, Algeria's APS news agency reported.

"It is very likely that OPEC will decide on March 15 to reduce production again to stabilise prices that are going down," said Chakib Khelil, referring to the oil cartel's next meeting in Vienna, according to APS.

The minister said OPEC's decision to reduce production by 4.4 million barrels per day in September had prevented oil prices from plummeting even further.