Oil prices fell below $99 a barrel Tuesday in Asia amid expectations that OPEC will raise its production quota this week.
Benchmark crude for July delivery was down 51 cents to $98.50 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.
The contract lost $1.21 to settle at $99.01 on Monday. In other Nymex trading in July contracts, heating oil fell 1.2 cents to $3 per gallon and gasoline dropped 1.4 cents to $2.94 a gallon.
Natural gas was off 1.4 cents at $4.81 per 1,000 cubic feet. Analysts said the black gold was also hit by weak lower demand after US economy showed less progress than expected. OPEC ministers could decide to try to push oil prices lower by increasing production.
OPEC officials have said that they believe oil prices are too high and threaten global economic recovery OPEC is likely to increase output quota when it meets at Vienna Wednesday to check spiraling prices. Traders and investors are also watching for the US Energy Department report, scheduled for Wednesday. The department last month cut its forecast for global oil consumption for this year to 88.08 million barrels a day from 88.2 million estimated in April. The difference between front-month contracts in London and New York reached a record $19.54 on Feb. 21. It averaged 76 cents last year. On Monday, oil prices fell amid worries about a faltering global economic recovery and speculation that the OPEC may raise supply. New York''s main contract, WTI light sweet crude for delivery in July, finished the trading session at $99.01 a barrel, a loss of $1.21 from Friday''s closing level. In London, Brent North Sea crude for July delivery shed $1.36 to settle at $114.48 a barrel.