Oil eases as OPEC output cut unlikely

Oil prices eased today as OPEC looked set to keep output unchanged at its meeting this weekend.

Oil prices eased today as OPEC looked set to keep output unchanged at its meeting this weekend.

US light crude was down 40 cents at $48.44 a barrel, after gaining six cents on Thursday when it rose as high as $49.65.

London's IPE Brent crude, which hit a 12-week high of $47.35 on Thursday, was down 45 cents at $45.99 a barrel.

"The rally may not be quite over - at least until January 30 when the OPEC meeting and Iraqi elections push sentiment one way or another," said JP Morgan's Head of Energy Research, Ms Katherine Spector, in a monthly report.

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"But weak fundamentals continue to point to a downward adjustment coming out of the winter months. We maintain our view that prices will target the mid- to upper-$30s by the second quarter."

Ministers from OPEC look unlikely to agree any change in the group's crude oil output at Sunday's meeting.

Several ministers have said that a cut in output cannot be justified due to the current high price of oil.

A cut had been mooted to prevent stocks from building too quickly in the second quarter, as demand falls after the northern hemisphere winter ends. Saudi Arabia's Oil Minister Ali Al-Naimi said on Thursday that OPEC could afford to wait at least until March before reducing supply.