The price of oil fell today to just above the two-year low set last week after Japan, the world's second-largest economy, formally entered recession.

The failure of the weekend meeting of the Group of 20 major economies to finalise any concrete measures to boost the global economy also helped to drive prices below $56 a barrel on Asian markets.

News that the Organisation of the Petroleum Exporting Countries (Opec) may wait until its meeting on December 17, instead of the end of November, to make a decision on whether to cut production targets again also weighed on prices.

US light, sweet crude fell $1.36 to $55.60 this morning, before rebounding slightly. On Thursday, fears over the state of the global economy drove the price to $54.67, its lowest since January 2007. In July oil hit $147 a barrel.

The price of Brent North Sea crude for January fell 94 cents to $53.30 on London’s InterContinental Exchange.

Chakib Khelil, the Opec president, said that the organisation’s meeting on November 29 would serve to set the agenda for the meeting in Algeria on December 17, when analysts expect Opec to cut production.

“Market focus in energy will again be on what Opec will be up to,” MF Global, the broker, said in a note to clients.

“We suspect that should the cartel put through another 1 million to 1.5 million barrels per day cut ... a good part of the current supply-demand imbalance will be redressed. However, it remains to be seen how quickly this excess crude will be taken off the market.”

The steep decline in oil prices has alarmed Opec, which is responsible for pumping around 40 per cent of the world’s crude oil. Iran favours reducing production by up to 1.5 million barrels a day, according to its state television service. Kuwait, Yemen and Libya have also voiced concern about the low oil price.

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