Oil prices dropped more than $3 on Monday after OPEC decided at a weekend meeting against cutting its production, preferring to wait until December before reducing crude exports. Oil plunged more than 9 percent to $49 a barrel on Monday after OPEC deferred a decision on new supply cuts at a meeting over the weekend. The producer group delayed a decision on output until later this month as Saudi Arabia and other Gulf members called for greater compliance with existing cuts agreed to since September to help stem oil's fall from highs over $147 a barrel struck in July. US crude settled down $5.15 at $49.28 a barrel, the lowest settlement since May 2005. London Brent crude fell $5.52 to settle at $47.97 a barrel. “The major motivation for sellers is the discounting of the OPEC decision ... but motivation is not hard to find (as) the elements propelling prices from 2003 on have largely dissipated,” said Mike Fitzpatrick, vice president at MF Global, in a report. Surging demand from emerging economies sent oil and other commodities on a six-year rally, but prices have tumbled since July as the economic crisis erodes demand in the United States and other big developed consumer nations. Federal Reserve Chairman Ben Bernanke warned on Monday that the US economy remained under considerable strain and said policy-makers must be ready to take decisive action to protect jobs and growth. “Crude oil futures were down over two dollars as OPEC's decision to leave output unchanged weighed on the markets,” said Sucden analyst Michael Davies. The OPEC's Secretary General Abdalla Salem El-Badri said on Monday that OPEC would decide on a “major” output cut next month if the oil market is deemed to be deteriorating.
