Oil price near four-year low in face of Opec cutback threat

Oil was today trading near its lowest in more than four years on scepticism that Opec's cut in supply will boost prices amid plummeting demand.

London Brent was down 41 cents at $48.08 at one stage following big falls yesterday.

The Organisation of Petroleum Exporting Countries said it will trim current production by 2.46 million barrels a day to 24.845 million.

But analysts do not believe Opec members will stick to the cuts.

"They have to make money. Cheating will begin and the market knows that," said Ken Hasegawa, a commodity derivatives sales manager at Newedge Group in Tokyo.

In any case, with fuel consumption in big markets such as the US plunging, few traders believed the output cuts would have much effect.

US fuel consumption in November fell 7.4% from a year earlier to the lowest for the month since 1998.

"The Opec cut was bigger than expected but it won't be supportive for this market. This market can go down to $30," Hasegawa said.

Prices are down 73% from a record $147.27 on 11 July.

Opec says the rate of compliance with a previous 1.5 million barrel-a- day output cut is more than 85%.

Russia slashed oil exports by 350,000 barrels a day last month and may reduce it by a further 320,000 barrels a day next year in collaboration with Opec if prices remain weak, Russian Deputy Prime Minister Igor Sechin said.

Other non-Opec producers may trim production as well, he added.