Oil will stabilize in Dec before rebounding: OPEC

Oil prices are likely to stabilize around current levels in December before OPEC output cuts take effect in strengthening the market, OPEC President Chakib Khelil said on Friday.

"It will stabilize somewhere where it is now as we don't really know how the economy will evolve," Khelil said when asked his view of oil prices for the balance of the year.

Oil fell below $34 on Friday to its lowest level in more than 4-1/2 years as the global economic slowdown overshadowed OPEC's record supply cuts.

U.S. light crude for January delivery touched $33.44 in early Friday trading, the lowest since April 2004. London Brent crude was trading at $43.54.

Oil prices have fallen by more than $110 from their peak above $147 in July. They look set for their second biggest weekly decline since 2003.

 The most important thing for the producers is how to monitor and control and regulate the financial speculation that affects the oil price whether it is going up or going down, 

OPEC Chief Chakib Khelil

Some OPEC ministers will attend an Arab economic summit scheduled for Jan. 19 in Kuwait which could be a forum for the group to look again at the oil market situation, Khelil said.

"On the 19th of January we have a heads of state meeting in Kuwait, kings and heads of state will deal with the economic state around the world but at the same time it will deal with energy so we could -- if needed -- we have not taken that decision - if needed we could have a meeting if things deteriorate".

Attending the high level conference of energy consuming and producing nations in London, Khelil said producers remained concerned about the level of speculation in world oil markets.

"The most important thing for the producers is how to monitor and control and regulate the financial speculation that affects the oil price whether it is going up or going down," said Khelil, who is also Algeria's energy minister.

"We feel very strongly that what happened in 2008...is due in great part to speculation and we need to make sure that the world community will regulate that," he added.

Oil has continued to drop despite pledges by OPEC this week to remove 2.2 million barrels per day from its supply, which will be the largest ever reduction by the producer group.

OPEC kingpin Saudi Arabia's Oil Minister Ali al-Naimi, speaking in London, said on Friday the kingdom would be pumping less oil in January and would be at its new output target in line with the group's latest cut.