LONDON: Brent crude slipped below $115 a barrel on Monday as concern about demand ahead of a key OPEC meeting later this week weighed on the market. Signs that high prices are destroying demand in the West, confirmed by the worst US jobs report since September, are worrying a group of OPEC's core members led by Saudi Arabia. They will push for a rise in output to reduce prices and support economic growth but are expected to meet opposition from Iran and Venezuela. "There is no need to increase OPEC production in the 159th meeting of this organization," said Iran's OPEC governor, Mohammad Ali Khatibi, according to reports citing the Oil Ministry website SHANA. Brent crude was down $1.49 at $114.35 at 1213 GMT, while US crude fell $1.32 cents at $98.90 a barrel. "Think the job report from Friday is still to be digested by the market. It lowered the probability of rate hikes in the US and the outlook for growth," said Thorbjoern Bak Jensen, oil market analyst at A/S Global Risk. Evidence of an economic slowdown in the US has fueled speculation that the Fed's bond-buying QE2 program may be extended beyond June. But lower oil prices could be a more effective solution to counter weakening output. "QE2 was self defeating because it led to commodity inflation. It may be worth trying having lower oil prices now," said Oliver Jakob, an analyst at Petromatrix. Measures that could be taken to trim prices included asking Saudi Arabia for help or considering alternative measures, including commodity market intervention as suggested by a UN report over the weekend, Jakob added. A top Federal Reserve official and well-known inflation hawk said on Monday the monetary tightening was still a possibility as the fundamental outlook for the economy was unchanged despite Friday's jobs report. The dollar pared early losses but remained near a one-month low against the euro, supported by firmer hopes of a new bailout for Greece and a convincing victory by debt-stricken Portugal's centre-right PSD party, ending months of uncertainty there. Deliveries to the US oil hub of Cushing via TransCanada Corp's 591,000 barrel-per-day (bpd) Keystone pipeline restarted, one week after being shut by a leak at a Kansas pumping station. Middle East supports A violent weekend in the Middle East could provide a floor to prices by reviving worries about clashes spreading to the world's largest oil and gas producers and disrupting global supplies. Syria said 23 people were killed in Sunday's protest near the Golan Heights after Israeli troops fired at Palestinian demonstrators marching to the frontier fence. But protests against Syria's own president Bashar Al-Assad were also bloody as the nation's forces shot 31 people dead during demonstrations in a crackdown that has killed at least 1,100 people over the past two months. And an absent president in Yemen was celebrated by protesters in the streets of Sanaa, who interpreted his absence as a sign he was losing his grip on the country. President Ali Abdullah Saleh was in Saudi Arabia recovering from an operation to remove shrapnel from his chest. Yemen's opposition coalition said on Monday it backed a transfer of power to the Yemeni vice president, now acting leader. –Additional reporting by Rebekah Kebede
