New York: Crude oil futures have plunged to settle below $ 41 for the first time in nearly five months, as traders branded OPEC's (Organisation of Petroleum Exporting Countries) production cut as too conservative to stem sliding prices.

Refined-product futures on the Nymex also sank yesterday (Dec 10, 2004), with heating oil futures nearing a three-month low, and gasoline futures falling to more than an eight-month low.

"This is a defining moment in the oil market," said a trader for Energy Merchant Corp, a New York energy supplier to marketers. "Bear markets shrug off bullish news and that's exactly what we've had today."

Benchmark light, sweet crude oil futures for January fell $ 1.82 to $ 40.71 barrel on the New York Mercantile Exchange.

"Forty-dollar crude is a fait accompli now," he predicted.

In London, Brent crude oil for January settled at $ 37.38 a barrel, down $ 2.29 on the International Petroleum Exchange.

After meeting yesterday in Cairo, oil ministers from the Organisation of Petroleum Exporting Countries decided to shave one million barrels a day off current oil-production levels from January 1.

Although the group's output ceiling is 27 million barrels a day, OPEC is estimated to be overproducing that level by about the same amount it plans to cut. The output ceiling applies to all members of OPEC, except Iraq.

Word of the resumption of previously halted crude flows in northern Iraq also weighed on prices, analysts said.