LONDON, Nov 15: The price of oil sank below $18 a barrel here on Thursday for the first time in over two years after Opec energy ministers squared up for a possible price war with non-Opec producers.

Brent North Sea crude for December delivery fell as low as $17.30, down $1.45 from Wednesday evening. The last time prices were so low was in July 1999.

In New York, December-dated light sweet crude futures tumbled $1.74 to $18 a barrel.

Prices dropped after the Organization of Petroleum Exporting Countries (Opec) agreed on Wednesday to slash output by 1.5 million barrels a day — more than six per cent — from January 1, 2002, but only if rival producers followed with a cut of their own.

The Opec basket price dropped to $18.09 on Wednesday from $19.23 on Tuesday, the Opecna agency reported from Vienna, far below the group’s target range of $22-28.

Traders said comments from Kuwaiti Oil Minister Adel al-Sebeih that he would not be surprised if the oil price fell as low as $10 a barrel was also eroding confidence.

Saudi Arabian Oil Minister Ali al-Nuaimi Al-Nuaimi appealed to non-Opec major producing countries to help resolve an energy market “crisis” sparked by the September 11 terrorist attacks.

“It is really an appeal to all major producers to work together at this time of crisis so that we can manage the market at reasonable price,” al-Nuaimi told journalists.

“Absolutely not .. until everyone cooperates” he said when asked if Opec will cut its output in line with a conditional accord reached by the 11-member cartel.

But Russia has so far offered only a symbolic cut of 30,000 barrels a day, infuriating Opec energy ministers.

Russian Prime Minister Mikhail Kasyanov said in Madrid on Thursday that Russia “will not make a large reduction” in crude production because it would contradict Russian oil policy,

Norway has snubbed Opec’s demands altogether. Of the key non-Opec producers, only Mexico is playing ball, saying it will reduce its outflow by up to 100,000 barrels a day if Opec and non-Opec producers also reduce output.

Analysts say that if Opec gains the support of other producers, prices could bounce back. But the stakes are high.

“There are two scenarios,” said Barclays Capital analyst Ali Tahghighi.

“The price could collapse to $14 or $15 if there is no agreement — it’s difficult to put a floor,” he told AFP.

“Or, if there is some kind of agreement, that is to say a resolution in the next few weeks, then the price could go back to $23-24.”

But prices would remain weak in the short term and the path of the global economy would also be a major determining factor because of its effect on crude demand, he added.—AFP