* OPEC maintains production levels at weekend meeting
* OPEC to discuss 1 to 1.5 mbpd cut later in December
* U.S. Nov factory activity weakest since 1981-82
recession
(Updates prices)
NEW YORK, Dec 1 (Reuters) - Oil plunged more than 7 percent
to $50 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. []
U.S. crude <CLc1> traded down $3.88 at $50.55 a barrel by
2:09 p.m EST (1819 GMT), while London Brent crude <LCOc1> fell
$4.30 to $49.19 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.
U.S stocks extended losses on Monday after manufacturing
data showing factory activity fell in November to its weakest
level since the 1981-1982 recession increased worries about the
world economic slump. []
"The OPEC meeting last weekend shows you that there's not a
lot the group can do to stop the free-fall in oil prices. On
top of that, the latest U.S. manufacturing data is playing into
the market psychology," said Phil Flynn, analyst for Alaron
Trading in Chicago.
"The weakness in the manufacturing sector foretells a bad
demand picture for oil."
OPEC's secretary general said the cartel is ready to cut
production by a significant amount when the group next meets on
Dec. 17 in Algeria. []
"We are all geared towards a cut in Algeria," Abdullah
al-Badri told a news conference in Tehran, two days after the
group's meeting in Cairo.
"The market is oversupplied because we are seeing stocks as
very high, about 55 to 56 days," he told reporters earlier.
Saudi Arabian Oil Minister Ali al-Naimi told Saudi-owned
al-Hayat newspaper that OPEC would not need to make a further
cut in oil supply when it meets in Algeria if producers comply
with previous curbs and fuel stocks decline. []
The group has agreed to trim 2 million barrels per day
(bpd) from production since September.
Saudi Arabia over the weekend said $75 a barrel would be a
"fair" price for oil, the first time in years that the world's
biggest exporter has identified a target for crude prices.
[]
"I believe $75 is the price for the marginal producer,"
Naimi told reporters in Cairo.
(Reporting by Matthew Robinson, Rebekah Kebede and Gene Ramos
in New York, Jane Merriman in London, Maryelle Demongeot in
Singapore and Osamu Tsukimori on Tokyo; Editing by Christian
Wiessner)
