World oil held steady above $36 today, at its lowest levels in more than four years, after Opec's announcement of a record production cut failed to rally prices.
New York's main futures contract, light sweet crude for delivery in January, rose four cents to $36.26 a barrel, off its morning low of $36.04. The contract dived $3.84 to $36.22, its weakest finish since July 2004, on the New York Mercantile Exchange yesterday.
Brent North Sea crude for February delivery slumped $2.17 to settle at $43.36 a barrel yesterday in London.
A slowing global economy and resulting fears of weaker energy demand have pulled prices down from record highs of $147 a barrel reached in July.
In a bid to shore up prices, ministers of the Organisation of Petroleum Exporting Countries (Opec) on Wednesday approved a record output cut of 2.2 million barrels a day, about 7 per cent of the cartel's output quota. Before the latest cuts, Opec's official daily output target was 27.3 million barrels a day.
"The verdict (of falling prices) was a resounding vote of no-confidence in the cartel's ability to curtail production given its previous tendencies to backslide on commitments, particularly by countries who are financially strapped," said MF Global oil analyst Ed Meir.