Oil drops below $95/ barrel in Asian trade

The oil prices dipped below $95 per barrel in Asian trade today after Saudi's oil minister Ali Al-Naimi declared the world markets were well supplied ahead of an OPEC cartel meeting scheduled next week.

In Asian trade, New York's main contract, light sweet crude for January delivery, was down 56 cents to $93.86 a barrel from $94.42 in late US trades last night.

Since climbing close to the $100 mark last week ($99.29 was the all time high), benchmark oil contracts have declined sharply by over $5. Brent North Sea crude for January delivery tumbled 49 cents to $92.03.

Earlier, the OPEC decided to raise output in September when it agreed to provide an extra 500,000 barrels of crude a day to the market, which was officially made effective from November 1.

However, despite pressures from developed countries, no decision on oil production was made at a rare OPEC summit earlier this month.

The oil prices have surged 64% since the start of calender year 2007, mainly driven by supply disruptions in key producers such as Nigeria, strong demand from China and India and jitters over the Iranian nuclear crisis.

Awaiting for the latest snapshot of US energy inventories due on Wednesday, dealers were of the view that going ahead the oil prices would fall if the global economy weakens.

In the short run, however, the dealers expect oil-price to rise because of the tight supply situation approaching the northern hemisphere winter, when demand for heating fuel spikes.