Oil falls below $59 on doubts over Opec cut

Oil fell below $59 a barrel today amid traders' doubts that all Opec members would follow Saudi Arabia's lead to curb output …

Oil fell below $59 a barrel today amid traders' doubts that all Opec members would follow Saudi Arabia's lead to curb output under an agreement reached last week.

US crude fell 86 cents to $58.47 a barrel. The front month contract lost $1.68, more than 2 per cent, on Friday to hit its lowest level this year. London Brent crude dropped 93 cents to $58.75.

Saudi Arabia told Japanese, Chinese and South Korean refiners it would cut their November crude sales by up to 8 per cent, industry sources said.

The news from Asian customers, who take nearly 50 per cent of Saudi oil exports, follows similar reductions reported by global oil majors two weeks ago.

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But Opec ministers' lack of unity on how to implement the cuts before the hastily arranged talks has left uncertainty in traders' minds on how the group will implement the curbs.

Some analysts said relatively high prices - still three times the level in January 2002 - meant there was less pressure on Opec members to play a team game.

It typically applies cuts evenly to Asian customers - an 8 per cent cut to the region would remove some 280,000 bpd from the market.

The Opec cut was its deepest since January 2002 and equal to about 4.3 per cent of September supply, but it has failed to halt oil's slide from its July peak of $78.40. Some Opec ministers said another cut of 500,000 bpd could follow when the cartel meets next in Nigeria in December.