Opec oil basket drops below $90 a barrel, first since 2011

The Organization of Petroleum Exporting Countries’ (Opec) basket of crudes dropped below $90 a barrel for the first time in more than 17 months.

The basket, a weighted average price of the main grades produced by Opec members, was $89.48 a barrel yesterday, data on its website showed on Friday. The crudes had been above $90 since January 4, 2011.

Opec’s 12 members agreed to leave the collective output ceiling unchanged at their June 14 meeting as prices dropped below $100 a barrel. The group would need to reduce output by 1.6 million barrels a day to comply with its limit of 30 million barrels a day, Secretary-General Abdalla El-Badri said on June 15.

Brent crude, the benchmark for more than half the world’s oil, dropped below $100 on June 1 for the first time since October, as the threat of global contagion from Europe’s debt crisis signalled fuel demand might tumble. Brent traded at about $88.5 on Friday on the ICE Futures Europe exchange in London.

Opec will probably cut output if crude remains at $90 a barrel, analysts at Morgan Stanley and Mirae Asset Securities Hong Kong Ltd said this month. Saudi Arabia, the world’s biggest crude exporter, pumped at the highest level in at least three decades this year to bring oil down to $100.