KUALA LUMPUR, Nov 28 (Reuters): Malaysian palm oil futures fell to their lowest in more than five weeks on Friday and were facing the biggest weekly drop in four years, dragged by steep losses in crude oil after OPEC decided against curbing output despite a huge oversupply.
OPEC's decision, which came after Saudi Arabia blocked calls from poorer members of the Organization of the Petroleum Exporting Countries for output reductions, sent benchmark crude to four-year lows.
Brent crude held above $72 a barrel on Friday, after plummeting $5.17 in the previous session to $72.58, while US crude for January delivery plunged to $68.91 a barrel, after earlier dropping to its lowest since May 2010 at $67.75.
"It looks like there's a year-end sale for palm oil and crude oil," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"Prices look bad on the back of the failure of the OPEC meeting. There was no constructive decision made, causing crude oil prices to drop over $4, which affected palm oil and the Dalian prices," the trader added.
The benchmark February contract on the Bursa Malaysia Derivatives Exchange slid to 2,150 ringgit, its lowest since Oct. 23, before settling down 1.5 per cent at 2,167 ringgit ($642) per tonne by the midday break.
Total traded volume stood at 21,952 lots of 25 tonnes, much higher the usual 12,500 lots.
Indonesia, the world's top palm producer, on Friday set its crude palm oil export tax for December at zero, unchanged from the previous month. Malaysia's tax rate has also been scrapped for December.
Elsewhere, Sime Darby Bhd, the world's largest listed palm oil producer, reported a 2.4 per cent rise in first-quarter profit, driven by gains from its plantations unit which saw better yields of fresh fruit bunches.
