Oil prices fell below $60 a barrel Friday as the market grew skeptical of reports that OPEC planned immediate cuts to production.
Analysts said the longer-term view is that the Organization of Petroleum Exporting Countries could very well act before the end of the year to trim its output as global inventories rise and economic growth slows. But they said prices could drift lower until they see definitive proof that oil has been taken off the market.
Light sweet crude for November delivery dropped 27 cents to settle at $59.76 a barrel on the New York Mercantile Exchange.
On London's ICE Futures exchange, November Brent crude fell 17 cents to settle at $59.83 a barrel.
"The market is not expecting any production cuts at the moment," said Tetsu Emori, an analyst with Mitsui Bussan Futures in Tokyo.
Prices had risen Thursday following reports that the 11-member Organization of Petroleum Exporting Countries was planning to trim its daily production by 1 million barrels.
Traders said they doubted whether all OPEC members would go ahead with any informal agreement intended to stem a 24 percent decline in prices since mid-July.
"The issue now becomes one of the OPEC moves versus the abundant stocks currently being held," said Paul Harris, an analyst for Bank of Ireland Global Securities in Dublin.
Credit Suisse said in a research note Friday that it expects oil prices to stay below $70 for the next three or four years as spare capacity builds up within OPEC.
"We believe this resolution process will likely take several years and will entail a period of widely fluctuating prices in the $50-$70 range," the note said. "We also note that the bulk of industry spare capacity, as has always been the case, will lie within OPEC countries, with attendant political and policy risks."
In other Nymex trading, heating oil futures rose less than a penny to settle at $1.694 a gallon while unleaded gasoline futures fell 1.23 cents to settle at $1.5042 a gallon. Natural gas futures gained 12.9 cents to settle at $6.427 per 1,000 cubic feet.