Crude oil prices lower 6% on OPEC inaction, dollar

Oil prices have been on the defensive since Friday, when the Organization of the Petroleum Exporting Countries took no action on production to address a supply glut that has depressed prices for more than a year.

United States benchmark West Texas Intermediate for delivery in January was trading 64 cents higher at $38.15 and Brent crude for January was up 48 cents at $40.74 at around 0630 GMT as dealers hunted for bargains after prices fell to their lowest in almost seven years this week.

Oil prices finished at their lowest levels since February 2009 on Monday as markets continue to reel from OPEC s refusal last week to cut back production. After the WTI contract dropped below $ 37 a barrel, the price is locked at $37.51 per barrel.

On Tuesday, Russia deputy finance minister Alexei Moiseev told Reuters that the major oil producer will need to enact additional spending cuts if the price of oil falls to $20 a barrel.

The EIA projected that the USA crude oil production will average 9.3 million barrels per day in 2015 and 8.8 million barrels per day in 2016.

OPEC last week failed to agree to an oil production ceiling, setting up the fractious cartel for more price wars in an already heavily oversupplied market.

Brent for January settlement was at $40.95 a barrel on the London-based ICE Futures Europe exchange, up 22 cents, at 4:06 p.m. Seoul time. Goldman Sachs said that it was "underweight commodities on a three-month basis, mainly due to downside for oil" but the bank added it was "less bearish over 12 months".

Oil has slumped about 40% since Saudi Arabia led OPEC's decision in November 2014 to maintain output and defend market share against higher-cost us shale producers.

With a history of exceeding its production rates, which were previously at 30 million barrels and are now at 31.5 million barrels, OPEC is not to be trusted. "At some stage however, there may be a collective awakening to the immediate impact lower input prices have on profits", he said in a commentary.

Energy companies - which have laid off more than 90,000 workers this year - continue to be hit hard by the oil supply glut.

Unlike other OPEC members, Indonesia is a net oil importer, and would be disadvantaged by an increase in prices.