NEW YORK – Oil prices fell on Monday after OPEC agreed to keep pumping at high rates to ensure world consumers were well-supplied despite a 20 percent slide in prices since mid-July.
U.S. light crude for October delivery settled down 64 cents at $65.61 a barrel, rebounding from an intraday low of $64.85, the lowest since March 28. London Brent crude fell 78 cents to $64.55 a barrel.
Iran's offer to halt temporarily its atomic work also pressured the market, as did robust fuel stocks and a sluggish hurricane season. Oil's six-day fall is its longest losing streak in nearly three years.
The Organization of the Petroleum Exporting Countries (OPEC) decided Monday to keep current production limits unchanged at 28 million barrels per day, but left the door open to a supply cut before the end of the year.
"There is no need to cut now but if there is a deterioration in the global economy and prices fall quickly, then we will need a meeting before December," Algerian Energy and Mining Minister Chakib Khelil told Reuters after Monday's talks.
For a year, OPEC has been pumping close to its fastest rate for 25 years to guard against price shocks and ease pressure on consumer economies. But forecasts that demand for OPEC oil will decline in 2007 are beginning to worry some in the group that pumps a third of the world's oil.
Saudi Oil Minister Ali Al-Naimi, OPEC's most influential voice, sought to calm those fears, saying oil demand would remain healthy next year.
"Market fundamentals are very sound," he told reporters. "We are beginning to see a slight decrease in economic growth, very slight ... It is nothing alarming."
Some analysts predicted that prices have peaked.
"Although risks remain, we now think that the $80 peak we had called is indeed the peak and that the ebb of crude oil and refined products prices has started," said Morgan Stanley in a research note.
Oil's losses came amid a wider fall in commodity prices, led by gold and copper as fund selling picked up pace and investors weighed the longer-term prospects for the asset class.
Big money funds piled into energy and commodities markets in recent years to take advantage of surging prices. Experts said oil prices could fall another $10 before finding a new floor.
"We're probably in the camp that this is a correction down to $55-$60 level and don't see it as an end to the energy bull market," said Erik Simpson of the Vantage Energy Hedge Fund.
"Our view is that overall demand is remaining at reasonable enough levels that the demand relative to supply equation remains tight."
Monday's bearish sentiment was exacerbated on cautious optimism over Iran's nuclear dispute with the West.
Iran, seeking to stave off sanctions, could be willing to suspend uranium enrichment during any new talks with world powers over its nuclear program, an EU diplomat said on Monday.
"When negotiations are under way, Iran would suspend its program during the negotiations. People estimate the negotiations would take two to three months," the diplomat told Reuters on condition of anonymity.
But it was unclear if Iran would meet the Western demand it suspend enrichment before the start of any talks on trade incentives aimed at ending the nuclear stand-off.
The United States said on Monday it still aimed to seek U.N. sanctions against Iran this month.