Oil sinks 5 pct on eurozone worries, OPEC meet

New York's main contract, WTI light sweet crude for January deliver, dropped $5.19 dollars from Tuesday's close to end at $94.95 a barrel.

In London, Brent North Sea crude for January dived $4.48 to $105.02 a barrel.

The fall mapped the drop in the euro to below the $1.30 line, to its lowest level since January 11, on signs of fragility in last Friday's pan-eurozone fiscal discipline pact.

Also spurring sellers was OPEC's meeting on production in Vienna. The 12-nation oil cartel nations agreed to maintain current output of 30 million barrels per day (bpd), citing an uncertain outlook for energy demand.

That acknowledged that the cartel has been consistently overproducing its own quotas.

Excluding the production of Iraq -- which is not held to quotas for the moment -- OPEC output in November was about 11 per cent, or more than three million barrels, above the official group output limit of 24.8 million bpd.

OPEC's accepting production of 30 million bpd "is in line with our expectations, but is equivalent to no quota at all. None of the individual members were assigned a quota," said James Williams of WTRG Economics.

"The real problem (is): Who cuts how much from what quota if prices collapse with a weak economy?" he said.

"If Iraq holds together it will continue to produce more oil. Who cuts back to compensate for an Iraqi increase when it comes, and who cuts back for the additional oil that will be coming out of Libya when production is restored?"

Speaking in Singapore ahead of the OPEC meeting, economist Fatih Birol of the International Energy Agency -- which represents oil consuming nations -- called on OPEC to keep up the above-quota crude production to help push down prices and aid global economic recovery.

Current oil prices posed "a major risk for the economic recovery worldwide," Birol said.