<div>Oil prices could plunge to $60 a barrel if Opec does not agree a significant output cut when it meets in Vienna this week, market players say.</div><div> </div><div>Brent crude futures have fallen 34 per cent since June to touch a four-year low of $76.76 a barrel on Nov. 14, and could tumble further if Opec does not agree to cut at least 1 million barrels per day (bpd), commodity fund managers say.</div><div> </div><div>"The market would question the credibility of Opec and its influence on global oil markets if there was no cut," said Daniel Bathe, of Lupus alpha Commodity Invest Fund.</div><div> </div><div>That could send Brent down to around $60, Bathe said.</div><div> </div><div>"Herding behaviour and a shift to net negative speculative positions should accelerate the price plunge," he added.</div><div> </div><div>Fund managers are divided over whether Opec will reach an agreement on cutting output. Bathe put the likelihood at no more than 50 per cent.</div><div> </div><div>The oil price has been falling since the summer due to abundant supply -- partly from US shale oil -- and low demand growth, particularly in Europe and Asia.</div><div> </div><div>As a result, some investors believe a small cut -- of around 500,000 bpd -- would not be enough to calm the markets.</div><div> </div><div>Doug King, chief investment officer of RCMA Capital, sees Brent falling to $70, even with a cut of 1 million bpd.</div><div> </div><div>If Opec fails to agree a cut, prices will drop "further and quite quickly", with US crude possibly sliding to $60, he said. US crude closed at $76.51 on Friday, with Brent just above $80.</div><div> </div><div><strong>Dependent on Non-Members</strong></div><div>With member states struggling to balance budgets, many <span style="line-height: 15.3999996185303px;">Opec</span><span style="line-height: 1.4;"> countries will be pushing for an output cut.</span></div><div> </div><div>"Prices below $80 are putting significant strain on the cartel's weakest members such as Venezuela," said Nicolas Robin, a commodities fund manager at Threadneedle.</div><div> </div><div>He said a bigger cut -- of 1 million bpd or more -- was an "outlier scenario", but such a move would rapidly push prices above $85.</div><div> </div><div>"A move higher would likely be accelerated by the lack of liquidity owing to the US (Thanksgiving) holiday next week," Robin added.</div><div> </div><div>Doug Hepworth of Gresham Investment Management said: "A surprise significant cut, say of 2 million bpd, is needed to push prices back up to $80. And that would have to be accompanied by some new-found discipline in the non-Saudi members."</div><div> </div><div>Former Qatari Oil Minister Abdullah Bin Hamad Al Attiyah said the 12-member group is dependent on non-members to strengthen the market.</div><div> </div><div>"This time, Russia, Norway and Mexico must all come to the table. <span style="line-height: 15.3999996185303px;">Opec</span> can make a cut, but what will happen is that non-<span style="line-height: 15.3999996185303px;">Opec</span> supply will continue to grow. Then what will the market do?" he was quoted as saying in a report.</div><div> </div><div>The market has been awash with conspiracy theories as to why Saudi Arabia has not already intervened.</div><div> </div><div>Tom Nelson, of Investec Global Energy Fund, said Saudi Arabia had allowed the price to fall to incentivise the smaller <span style="line-height: 15.3999996185303px;">Opec</span> producers, which often rely on the biggest producer to intervene, to join Riyadh in cutting output.</div><div> </div><div>"They (the Saudis) want to cut but they don't want to cut alone," Nelson said, adding that a cut of between 1 million and 1.5 million bpd should be sufficient to balance the market.</div><div> </div><div>"The market really wants to see that <span style="line-height: 15.3999996185303px;">Opec</span> is still functioning ... if there is a small cut, with an accompanying statement of coherence from <span style="line-height: 15.3999996185303px;">Opec</span> that presents a united front, and talks about seeing demand recovery, and some moderation of supply growth, then Brent could move up to $80-$90."</div><div> </div><div>(Agencies)</div>
