Oil hovers around US$74 as OPEC eyes production cut

SINGAPORE - Oil prices hovered around US$74 a barrel Tuesday in Asia as all The investors expected OPEC to try to halt a three-month slide in prices by cutting production quotas at least 1 million barrels a day.

Light, sweet crude for November delivery dipped 26 cents to US$73.99 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore, after reaching as high as US$75.69 earlier in the session. The contract gained overnight US$2.40 to settle at US$74.25.

Prices closed as low as US$69.85 a barrel last week, down 53 per cent from a record US$147.27 on July 11.

"A cut of at least 1 million has been priced in. A cut much larger than 1 million could move prices higher."said Victor Shum, an energy analyst at consultancy Purvin & Gertz in Singapore.

The Organization of Petroleum Exporting Countries, which accounts for about 40 per cent of global oil supply, plans to announce an output reduction at a meeting on Oct. 24 at its headquarters in Vienna, said the group's president, Chakib Khelil.

Khelil has said OPEC may cut output again at a meeting in December, and that the group considers the oil market oversupplied by about 1.5 million barrels a day.