Oil prices sink ahead of OPEC summit

Oil prices fell sharply for a second day Thursday ahead of OPEC's summit to review its production levels amid an oversupplied market.

US benchmark West Texas Intermediate for July delivery fell $1.64 to $58.00 a barrel in New York trade, after a $1.62 drop Wednesday.

In London, Brent crude for July lost $1.77 to $62.03, following a $1.69 loss Wednesday.

OPEC officials and delegates in Vienna for the meeting Friday expressed some frustration with the low prices, but gave no signal that they would move to cut output to tighten suppliers.

"We are still surviving -- it's not the situation we prefer, of course. It all depends on the second half now for oil prices," Kuwaiti Oil Minister Ali al-Omair told reporters.

Asked if he was pleased with the current state of the market, Omair replied: "It is improving, of course."

He added: "If the price does not rise to $77 a barrel, then the Kuwaiti budget will be in deficit."

Still, analysts expect the cartel, led by oil powerhouse Saudi Arabia, to stick to its current official production target of 30 million barrels per day, as it hopes to drive out from the market high-cost producers like the shale oil drillers in the United States.

Indeed, the International Energy Agency estimates that the group, responsible for about one-third of global output, is pumping 31.2 million barrels a day.

"The market consensus is it's almost a certainty OPEC will leave its production in place," said market analyst James Williams at WTRG.

"Probably they won't change their ceiling, but it is very likely the Saudis and other Gulf countries will indicate that if anybody wants more oil, they will give it to them."

"The real question is: how long the Saudis will keep this policy?" he added.