LONDON – Oil fell below $60 a barrel on Friday as investors doubted OPEC's resolve to carry out a planned supply cut and fuel inventories swelled in the United States, the world's top consumer.
U.S. crude settled 27 cents lower at $59.76 a barrel, off nearly $20 from its mid-July peak of $78.40. London Brent fell 17 cents to $59.83.
OPEC President Edmund Daukoru said on Friday he intended to secure a supply cut deal by Monday that would remove about 1 million barrels per day of crude from the market to slow the rapid decline in oil prices.
But investors were wary as the Organization of Petroleum Exporting Countries group had yet to make an official statement on the planned cuts.
"It is a big surprise to the market that OPEC has not been prepared to formally announce the decision to cut," said Frederic Lasserre, head of commodity research at SG CIB Commodities.
"It looks like it may take some time for OPEC to decide how to allocate this cut — and that is bearish, not bullish."
OPEC members have discussed but not yet decided whether to hold an emergency meeting October 18-19 in Vienna, Daukoru said.
A cut of a million bpd would remove about 3.4 percent of total OPEC supply from the market.
Investors turned their attention back to ample production and high stocks as they waited for official word from OPEC, which pumps over a third of global oil supplies.
"If OPEC is not able to get any credibility in reducing supply, then we are back to fundamentals," Lasserre said.
"And the fundamentals are that we have plenty of stocks around — they are still building up — which means that the market is oversupplied quite substantially."
U.S. distillate supplies, which include heating oil, rose by 200,000 barrels to their highest level since 1999 last week, according to a government report this week.
Crude oil and gasoline stocks were substantially higher than at the same time last year, the report said.
Despite the high stocks cushion, OPEC's plan to cut supply has disappointed the United States.