By Alexander Kwiatkowski Dec. 22 (Bloomberg) -- Crude oil dropped after the Organization of Petroleum Exporting Countries agreed to maintain production targets at a meeting in Angola. The producer group will hold total production quotas at 24.845 million barrels a day. Algerian Oil Minister Chakib Khelil and other officials confirmed the decision as they left the meeting. It’s the fourth time this year the group has met without revising the figure. “No change in quotas was largely expected by the market,” said Kaha Kiknavelidze, a managing partner at London-based Rioni Capital Partners LLP, a hedge fund that specializes in emerging markets. “More important is compliance which has deteriorated meaningfully. That puts pressure on prices.” Crude oil for February delivery dropped as much as 59 cents, or 0.8 percent, to $73.13 a barrel in electronic trading on the New York Mercantile Exchange. It traded down 44 cents at $73.28 a barrel at 12:19 a.m. London time. Crude’s 64 percent rise this year has encouraged some OPEC members to renege on their pledge in 2008 to reduce 4.2 million barrels a day of output. Members complied with 58 percent of cuts in November, down from 60 percent the previous month, according to the International Energy Agency estimates. Prior to the meeting, ministers from member states including Saudi Arabia and Algeria said there was a consensus to keep quotas at current levels as they gathered for the closed- door discussions. Brent crude oil for February settlement traded at $72.56 a barrel, down 43 cents, on the London-based ICE Futures Europe exchange. It earlier fell as much as 0.7 percent to $72.50 a barrel. ‘More Serious’ “At this point going forward, OPEC has to get a bit more serious at either improving compliance or really holding the line and stopping this upward creep in production,” said Mike Wittner, head of oil research at Societe Generale SA in London. “OPEC’s strategy is if you combine recovering demand with flat OPEC production, you are going to get stock draws.” The U.S. Energy Department will report its latest stockpile data tomorrow. Distillate fuel inventories in the U.S., the world’s largest energy user, probably fell as colder weather moved across the country’s north, according to a Bloomberg News survey. U.S. distillate inventories, which include heating oil and diesel, probably dropped 2 million barrels in the week ended Dec. 18 from 164.4 million the previous week, according to the median of estimates from 12 analysts before an Energy Department report tomorrow. All of the survey respondents forecast a decrease. Crude oil inventories probably declined 1.73 million barrels from 332.4 million, the survey showed, while gasoline stockpiles are expected to have climbed 1 million barrels from 217.2 million. Prior to the Energy Department report, a similar weekly inventory snapshot will be published later today by the American Petroleum Institute. -- With assistance from Rachel Graham in London Editors: Will Kennedy, Rob Verdonck. To contact the reporter on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.net.

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