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London: Oil prices fell below $58 a barrel yesterday, even though Opec made a deeper output cut than expected, on concerns that some of the group's members may fail to comply with the curbs.
"There's still a degree of scepticism over whether they will deliver all the cuts," said Tobin Gorey, commodity strategist at Commonwealth Bank of Australia.
US crude fell 65 cents to $57.85 a barrel by 1510 GMT, less than $1 above the 2006 low touched a week ago. London Brent fell 69 cents to $60.18 a barrel.
Opec ministers agreed on Thursday to reduce output by 1.2 million barrels per day (bpd), 200,000 bpd more than expected.
Some ministers said a further cut of 500,000 bpd could follow when Opec next meets in Nigeria in December.
They said they were concerned about high fuel stocks in consumer countries, particularly in the United States, and a projected drop in demand for Opec oil in 2007 as competitors bring more supplies online.
The group, which supplies about a third of the world's crude, said in a statement after an emergency meeting in Doha that oversupply had destabilised the oil market.
The cut was its deepest since January 2002 and is equal to about 4.3 per cent of September supply.
"It was a surprise. It shows the determination of Opec," said Tetsu Emori, chief strategist at Mitsui Bussan Futures in Tokyo. "They obviously wanted to send a message to the market, he added."
"This is not the end of the road because we have another meeting coming up," said Saudi Arabia's Oil Minister Ali Al Naimi.
Al Naimi said Saudi Arabia fully backed the Opec cut and had already notified customers of lower supply. The world's largest exporter will shoulder around 32 per cent of the cut, amounting to 380,000 bpd.
Ministers' failure to speak with one voice before the hastily-arranged talks had deepened oil's losses of around 25 per cent from a mid-July peak of $78.40 a barrel.
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