Oil prices tumbled Tuesday as doubts grew that the Organization of Petroleum Exporting Countries will cut output at its ministerial conference in Vienna.
"The consensus in the market is saying basically it looks unlikely we're going to get anything positive out of Vienna," said Nauman Barakat of Merrill Lynch.
January crude oil fell 47 cents to $16.63 a barrel at the New York Mercantile Exchange.
OPEC opened the key strategy session Tuesday with a warning that oil prices are dangerously low and that producers must take whatever action is necessary to raise them.
Gabonese Oil Minister Jean Ping, outgoing president of the 12-nation cartel, called for urgent measures to drive prices up from their lowest levels in more than three years.
Other ministers echoed his concerns about prices.
"It is not acceptable," said Iranian Oil Minister Gholamreza Aqazadeh at the start of the winter conference at cartel headquarters in the Austrian capital.
However, no one suggested specific steps for slashing oil production in an attempt to limit supply and push prices higher. Demand for oil normally rises during the winter heating season in the United States and Europe.
Saudi Arabia Oil Minister Hisham Nazer made no comment at the start of the meeting, during which reporters were allowed to question the officials.
Oil analysts have said OPEC must cut production by about 500,000 barrels a day to strengthen prices, but the group does not appear to be near a consensus on any reductions.
"Its only chance is to cut production, and at the moment it seems very reluctant to do that," said Simon Trimble of Lehman Bros.
Saudi Arabia, the world's largest oil exporter, has not indicated its support for lowering the cartel's 24.5-million-barrel-a-day quota. Increased production by non-OPEC producers such as Norway and Britain have glutted a market that lacks strong demand because of recessionary economies around the world.
In an opening speech, Ping said the average price of an OPEC marker skidded Monday to $14.70 a barrel. The benchmark is at its lowest level in more than three years and far off the group's target of $21 a barrel.
The price is "dangerously below what most of us would recognize as the minimum level of economic rent" for oil, he said.
Vahan Zanoyan, senior director of Petroleum Finance Co. in Washington, predicted that prices will tumble another dollar or two if the producers fail to restrain pumping in the coming months. "It's either fix it now or fix it when (prices) get much worse," he said.