NEW YORK - World oil prices slipped on Monday, continuing last week’s retreat and adding to confusion about whether the Opec cartel will carry out its plan to cut crude production next month.

US light crude settled 28 cents lower at US$35.45 a barrel, extending last week’s US$2.35 loss. London Brent crude settled 25 cents weaker at US$31.74.

Ministers of the Organisation of Petroleum Exporting Countries were gathering in Vienna for a meeting Wednesday to decide whether to implement a cut of 1 million barrels per day in output starting April 1.

Some in Opec admit oil prices are high and favour postponing a February deal to cut supplies in April. Others blame speculative investment funds for boosting prices and they worry the funds are preparing to exit the market, which could cause an oil price avalanche.

Upon arrival in Vienna on Monday, Oil Minister Ali al-Naimi of Saudi Arabia, Opec’s top producer, said oil markets were well supplied. He said the production group will need to study data before making a decision, but he said Opec had already implemented a cut of 1 million barrels per day by adjusting nominations to buyers in March.

Opec’s February decision boosted oil prices, which peaked two weeks ago when US crude hit the highest settlement in 13 years at more than US$38. But prices eased last week, prompting some oil traders to predict a lengthy bull run had ended.

"The cartel is in something of an unenviable quandary, no matter what it decides. If it does not cut, prices are bound to come off as the market has to give up some of the gains it has chalked up since Feb. 10," Edward Meir of brokers Man Financial said.

"Alternatively, if it does cut, prices could still go down if the market perceives that the cartel is unable or unwilling to enforce its cuts."

"Basically, it’s all eyes on Opec now," one oil trader in London said. "No one really wants to do anything until it’s clear what Opec will do. But, personally, I feel this market has hit a top."

SPECULATORS

Saudi Arabia said in a release on Saturday it favoured a stable crude price but added that factors affecting market stability included "the important role of speculators," suggesting it sees only a limited influence of supply-demand fundamentals in the high price.

Opec remains fearful of a potential price crash during the low-demand second quarter, especially as speculative investment funds are holding near record long positions in the oil futures market.

Latest data show speculative funds have boosted their long positions in the US futures markets, continuing a trend of fund money flowing into oil and commodities.

Booming Chinese consumption, thin US petrol stocks and worries over terror attacks have underpinned prices.

Opec President Purnomo Yusgiantoro on Monday suggested prices may not have fallen sufficiently to remove the cartel’s concerns.

"We are concerned about the high price, though it is slightly down," he said on his arrival in Vienna.

Others in Opec clearly want to proceed as planned with the April cuts.

"It is our position that in the second quarter there will be a reduction in demand, so we will work for the cut in production to support prices," Algerian Oil Minister Chakib Khelil said.

With retail petrol prices in the United States at record highs, pressure is mounting on Opec from Washington. The US government said last week it would hold private talks with Opec to seek more supplies and reduce petrol prices.

The proposed cuts so far are seen making little dent in actual physical supplies for April. Nigerian Oil Minister Edmund Daukoru admitted last week the timing for implementing the cut had slipped.

A Reuters survey of producers’ and buyers’ loading schedules for April showed that cuts would be about 335,000 bpd, only a third of planned reductions.

- REUTERS