JAKARTA, Dec 18: Malaysian palm futures lost more than 2 per cent on Thursday after crude oil hit its weakest level in more than four years despite Opec’s biggest ever production cut.

The benchmark March palm oil contract on the Bursa Malaysia’s Derivatives Exchange dropped 35 ringgit, or 2.22 per nt, to 1,545 ringgit ($447) per ton.

Other traded contracts dropped between 18 ringgit and 53 ringgit. Overall volume was thin at 8,696 lots of 25 tons each.

The market was down today mainly due to the sharp drop in crude oil prices.

Trading has also been quiet as we are moving into the holiday season, a trader at a Malaysian brokerage firm said.

The trader said that the market may move in a tight range of 1,500 to 1,600 ringgit towards the end of the year.

US light crude for January delivery , which expires on Friday, rose 54 cents to $40.60 a barrel by 1021 GMT in electronic trading, after falling to $39.19 earlier in the session, the lowest since July 2004.

At $40 a barrel, oil is more than $107 off its July peak, having shed almost three quarters of its value as the onset of a global recession cuts into fuel demand.

Palm oil tends to track crude oil moves as rival vegetable oils such as rapeseed and soyaoil are increasingly used as a feedstock for biodiesel.

In Indonesia, the world’s largest palm producer, the Jakarta-based state marketing centre sold palm oil at a top price of 5,258 rupiah ($0.48) per kg, against 5,246 rupiah per kg on Wednesday.

Producers in Medan -- home to Belawan port, Indonesia’s key port for palm oil exports -- sold palm oil at 5,200 rupiah per kg. They did not hold a tender for palm oil on Wednesday.

Meanwhile, refiners in Jakarta sold refined, bleached, deodorised (RBD) palm oil, used as cooking oil, at 5,800 rupiah per kg, unchanged from Wednesday.—Reuters