Oil prices fell back below $54 a barrel today ahead of this weekend's crucial meeting of the Opec oil exporting countries in Cairo.

In New York, the price of a barrel of crude slid $1.66 to $52.78 while London's Brent gave up 67 cents at $52.46.

Traders said that while they expect Opec to try agree some kind of production cut they still do not expect it to be enough to counter the overall gloom which is now affecting the world's energy markets.

"The drop-off in demand is going to continue," said Jonathan Kornafel, director of Hudson Capital Energy in Singapore. "There's no reason for the market to rally."

Oil prices have fallen more than 60% from their peak of $147.27 in mid-July and have fluctuated between $50 and $55 a barrel all this week.

Kornafel expects the price to fall below $50 in the near future and that it could test $40 before the end of the year.

He is not expecting a cut in production from the Cairo meeting but instead predicts that a cut of 1.5 million barrels a day will be agreed at the exporters' December meeting.

The economic news coming out of America this week has been grim with indications that the fourth quarter will see a severe recession. Gasoline demand fell 1.3% in the US last week.

Opec secretary general Abdalla el-Badri yesterday said that there was now a world oversupply of oil.

"Opec can only control one side of the equation and that is the supply side," said Stephen Schork, editor of Energy Market Intelligence's Schork Report. "They can't impact the demand side one bit. We know demand is weak and we are pretty sure it will get weaker."