Oil prices tumbled Tuesday, with the US benchmark down 2.2 percent, on expectations that the OPEC cartel will not agree to cut output Thursday despite ample global supplies.
The key US futures contract, West Texas Intermediate for January delivery, dived $1.69 on the New York Mercantile Exchange, closing at $74.09 a barrel, its lowest level since mid-September 2010.
Benchmark Brent North Sea crude for delivery in January settled at $78.33 a barrel in London, down $1.35 from Monday's close.
The 12-nation Organization of the Petroleum Exporting Countries (OPEC) will hold one of its toughest meetings in recent years on Thursday, with members under pressure to address tumbling prices that have slashed their revenues.
OPEC, which provides about a third of the world's oil supplies, has had a group output quota of 30 million barrels per day for the past three years. The cartel pumped 30.6 million barrels per day last month, according to the International Energy Agency.
Since June, oil prices have fallen about 30 percent, leading poorer cartel members like Venezuela and Ecuador to call for a production cut at Thursday's meeting at OPEC headquarters in Vienna.
But the cartel's Gulf members, led by kingpin Saudi Arabia, are rejecting such calls unless they are guaranteed market share in the highly competitive arena, according to analysts.
Despite the apparent differences, OPEC and non-OPEC oil producers Tuesday agreed that crude prices have fallen too far, Venezuelan Foreign Minister Rafael Ramirez said.
"We agreed that the price is not good. Everybody is worried," he told reporters after OPEC members Saudi Arabia and Venezuela met with officials from fellow oil producers Russia and Mexico in Vienna. Russia and Mexico are not OPEC members.
Robert Yawger of Mizuho Securities USA said the oil market was being dictated by the latest OPEC headline -- the latest significant one being "the failure of the meeting between Saudis, Venezuelans, Mexicans and Russians to find some ways of cutting production."