OPEC CONSENSUS Mohamed bin Dhaen Al Hamli , UAE energy minister, and other Opec leaders have agreed to maintain the oil output quota during a recent meeting in Abu Dhabi (AFP)
Oil fell two per cent on Friday to below $88 a barrel, resuming a steep slide spurred by rising worries about the health of the United States economy.
Oil prices have dropped about 12 per cent since the record $99.29 hit November 21 in extremely volatile activity as dealers weigh an uncertain demand outlook against tight stockpiles.
US crude settled down $1.95 at $88.28 a barrel, after touching a low of $87.07, erasing Thursday's $2.74 gain. London Brent traded down $1.54 to $88.64 a barrel.
Better-than-expected jobs data out of the US took some of the gloom off the economic lanscape, but damped hopes for a sharp rate cut by the Federal Reserve next week.
"That's part of the reason crude prices were off today ... the likelihood of a smaller rate cut, means less pressure on the dollar," said Peter Beutel, president of consultancy.
Dollar-denominated commodities typically weaken when the dollar strengthens against other currencies.
The US has been struggling with a housing crisis that some economists say threatens to trigger a recession and hurt oil demand growth.
US President George W. Bush on Thursday unveiled a plan to bail out troubled homeowners by freezing rate increases on adjustable-rate subprime mortgages for five years.
Organisation of Petroleum Exporting Countries (Opec) ministers this week declined to boost output in the face of requests for more oil from the US and other consumer nations, saying the markets are well-supplied.
Some energy experts have said Opec's output levels are not enough to stem sliding crude inventories and could trigger a crunch when heating demand peaks this winter.
The weak US dollar, which has supported prices for many commodities, and concerns about winter supplies sent oil on its record run toward $100 a barrel.
US stockpiles of oil dropped last week to their lowest since early 2005.
But inventories of refined fuel in the world's largest energy consumer rose during the same week thanks to higher imports and a boost in domestic production. (REUTERS)