LONDON, June 8 – Oil prices dropped on Wednesday as a divided OPEC considered whether to boost output in a move aimed at reviving weak global economic growth but which risks lower revenues for producing nations.
The market was also awaiting weekly energy inventory data from the United States, the world\’s largest oil-consuming nation.
New York\’s main contract, light sweet crude for delivery in July, fell 69 cents to $98.40 a barrel.
Brent North Sea crude for July lost 47 cents to $116.31.
"The market was nervous ahead of today\’s all important OPEC policy meeting (decision) in Vienna," said Andrey Kryuchenkov, a commodities analyst at VTB Capital financial group.
"The market\’s reaction would depend on the scale of a potential hike and following comments. Prices could pull-back significantly if there was an unexpected quick consensus with OPEC showing it can act quickly and decisively by reaching new output targets to elevate supply fears," he added.
The Organization of Petroleum Exporting Countries (OPEC) squared up on Wednesday for a critical decision on whether to raise oil output for the first time in almost four years so as to help out a slowing global economy.
One central factor is a choke on production in Libya owing to unrest.
OPEC, which accounts for an estimated 40 percent of global oil supplies, will announce its decision after a regular meeting of its 12 member nations in Vienna, where the cartel is headquartered.
Consumer nations want OPEC to pump more crude amid concerns that high oil prices could further damage the faltering global economic recovery.
Brent crude has soared by about 21 percent so far this year as spreading unrest in the oil-rich Middle East and North Africa region cut supplies.
Unrest in OPEC member Libya, which erupted in February, has removed about 1.3 million barrels per day from the global oil market.
Later Wednesday, the US Department of Energy publishes its latest figures for energy stockpiles. Analysts are expecting US crude and distillate inventories to have fallen last week, while gasoline stocks are forecast to have risen, according to a survey by Dow Jones Newswires.