Brent crude oil traded at $107.49 on Monday morning ahead of a big decision expected later in the week as OPEC chooses a new secretary-general.
The 12 nation cartel, which includes heavily embargoed Iran, is expected to hold its regular meeting on Wednesday to discuss output, and possibly decide on a new leader since the original vote in June was postponed.
A Cairn India employee works at a storage facility for crude oil at Mangala oil field at Barmer in the desert Indian state of Rajasthan August 29, 2009.
According to Economic Times, the official production target is unlikely to change in December. June's meeting maintained the current output ceiling of 30 million barrels per day in an effort to eliminate over production.
Concern about a weakening market has kept a ceiling on prices, but the unofficial target for the 12-nation cartel has been $100, instead of the $105-$110 range that Brent has been trading in recently. As the world's largest oil consuming countries face economic trouble, prices are expected to drop under the pressure of weakening demand.
The US fiscal cliff has weighed heavy on prices as Republicans and Democrats continue to butt heads over how to deal with the country's deficit. With little progress toward a compromise, many are concerned that the country could sink into recession in the New Year.
Prices have been supported by geopolitical risks as an ongoing civil war in Syria has touched neighboring countries like Turkey and made the region unstable. Heavily embargoed Iran has also lent support to prices as the West continues to sanction the country in an effort to cut funding to the nation's nuclear development program.
Though new sanctions were added just last week, Iran has shown little restraint in moving forward with its uranium enrichment.
(c) 2012 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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