World oil prices slipped to fresh nine-year lows at the start of the week in the absence of any coherent support strategy by major producers.
In a market beset by Monday morning blues the price of April delivery Brent blend, the international benchmark grade, slipped to $12.57 a barrel on the London's International Petroleum Exchange (IPE), 19 cents down on the day.
It had earlier traded at $12.50 a barrel in Singapore, a new nine-year trough, though that level was seen by London brokers as a bid to push values lower ahead of the expiry of the April futures contract at Monday's close.
Dealers said the postponement of Opec's market monitoring committee (MMC) meeting from Monday until March 30 had reaffirmed the impression the Organisation of Petroleum Exporting Countries was in disarray.
"It looks as though things will go lower still before the meeting," a London oil broker said. "It is clear there is new downward pressure coming out."
The committee, made up of oil ministers from Iran, Nigeria and Kuwait, had been due to assess member compliance with new quota ceilings agreed at the group's last full gathering in Indonesia in November.
The Jakarta decision to raise output allocations by 10 per cent and continued quota busting by leading cartel members have been blamed for triggering the catastrophic 40 per cent slide from last year's average price of $19.30 a barrel.
Domestic political tribulations in some member states and a fear the MMC meeting would do more to damage cartel credibility than restore it lay behind the postponement, insiders said.
Kuwait's government has resigned and current Opec president Ida Bagus Sudjana, who would also have been at the gathering, was replaced as Indonesian energy minister at the weekend by Kuntoro Mangkusubroto.
His Opec status remains unclear. The MMC would have no power to adjust quotas and looks unlikely to be converted to a full emergency meeting with more authority because of opposition by cartel kingpin Saudi Arabia.
The desert kingpin, the world's largest oil exporter, is locked in a bitter dispute with Venezuela, Opec's biggest over-producer, over responsibility for the price fall which has drastically cut incomes for Opec state treasuries. Saudi Arabia says other Opec members must take the lead in cutting production.
It has accused quota-busters of trying to steal its customers and says it is prepared to tough out current price falls until others buckle.
Quota-busting took Opec output to around 28.7 million barrels per day in February, well above the nominal ceiling of 27.5 million bpd.
"Opec is in complete disarray. They know they need to cut back but they are not sure who's going to do it first," said a London oil futures trader.
Venezuela has said Opec cannot take sole responsibility for prices, and has pointed to hefty production levels outside the 11-member group.
"Collective action should take place by all the main producers - somehow related to market share," Leslie Nicholas of brokers GNI said in his daily market report.
Extra Iraqi oil due to be exported in the summer under the auspices of an expanded United Nations "oil-for-food" deal will swamp markets already drowning in unwanted crude. But analysts doubt the extra two weeks before the rescheduled MMC will be long enough to resolve the current polarity within Opec. Last week Washington-based consultants The Petroleum Finance Company said prices would have to fall further "to soften entrenched positions."
