UPDATE 7-Oil at lowest in almost seven years on OPEC inaction, strong dollar

* OPEC omission of output target reference exposes rift
* Saudi Aramco CEO hopes prices will recover in early 2016
* WTI forward curve slips below $60 a barrel

(Releads, updates prices)
By Karolin Schaps
LONDON, Dec 7 (Reuters) - Oil prices fell to their lowest in
nearly seven years on Monday after OPEC's meeting ended in
disagreement over production cuts and without a reference to its
output ceiling, while a stronger dollar made it more expensive
to hold crude positions.
The Organization of the Petroleum Exporting Countries (OPEC)
ended its policy meeting on Friday without agreeing to lower
production.
For the first time in decades, oil ministers dropped any
reference to the group's output ceiling, highlighting
disagreement among members about how to accommodate Iranian
barrels once Western sanctions are lifted.
"A stronger dollar and the aftershock of Friday's OPEC
meeting are weighing on the oil market," said Tamas Varga, oil
analyst at brokerage PVM Oil Associates in London.
Brent crude prices LCOc1 , the globally traded benchmark,
traded down 82 cents at $42.18 a barrel at 1334 GMT and touched
a low of $42.11, the lowest since March 12, 2009. U.S. crude
CLc1 was down $1.12 at $38.85 a barrel, a drop of nearly 3
percent.
The dollar .DXY was up against a basket of currencies.
Analysts at Barclays (L:BARC) said the lack of an OPEC production
target in its written announcement was a sign of discord.
"Past communiques have at least included statements to
adhere, strictly adhere, or maintain output in line with the
production target. This one glaringly did not," they said.
OPEC's output of more than 30 million barrels per day (bpd)
has compounded an oil glut, pushing production 0.5 million to 2
million bpd beyond demand and putting many producers under
pressure, especially small-sized U.S. shale drillers that have
piled up large amounts of debt.
Analysts at Commerzbank (DE:CBKG) said any recovery in prices would be
dictated not by OPEC but by rising demand and a fall in
production outside of the group.
"Rising oil prices next year will not depend on OPEC
reaching immediate agreement or on a return to price control, as
we expect prices to increase primarily on the back of continued
robust demand growth and a decline in non-OPEC oil production,"
they said in a report.
Saudi Arabia, the world's biggest oil exporter, is banking
on producers of unconventional oil buckling for output to fall.
Saudi Aramco Chief Executive Amin Nasser said at a
conference in Doha on Monday that he hoped to see oil prices
adjust at the beginning of next year as unconventional oil
supplies start to decline.
In a sign that U.S. production could dip, Baker Hughes'
November data showed U.S. rig count numbers were down by 31
month on month to 760 rigs.
Others disagreed. Patrick Pouyanne, CEO of French oil
company Total TOTF.PA , said at the same event that he did not
expect prices to recover next year as production growth was set
to outstrip a rise in demand.
"It is not unreasonable to assume that downward pressure on
prices will remain for the foreseeable future, as it will take
time for low prices to materially scale back production," Cenkos
Securities analyts said.
In a sign that investors expect prices to remain weak for
years to come, WTI forward contracts out to 2024 have dropped
below $60 a barrel.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
CHART-Entire crude oil forward curve drops below $60 http://reut.rs/1XO2mlR

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>