Dec. 10 (Bloomberg) -- A likely cut in crude oil production by OPEC will fail to support prices because of weakening demand, with oil potentially dropping as low as $30 a barrel by the end of next year, Deutsche Bank AG said in a report.

Since 1993, the Organization of Petroleum Exporting Countries has acted a dozen times to cut output and reduce quotas to defend the crude oil price, with just “a 75 percent success rate,” Chief Energy Economist Adam Sieminski wrote.

Oil prices have tumbled 70 percent since reaching a record $147.27 a barrel in New York on July 11 as the worst financial crisis since the Great Depression grips the global economy. Oil traded at $43.69 at 9:25 a.m. Singapore time. OPEC is unable to cut production as fast as demand growth for the fuel is slowing, the analysts said.

“We continue to believe that weak economic growth is likely to have a much greater impact on oil demand growth than is currently factored into consensus supply and demand forecasts,” Sieminski wrote in the report, dated Dec. 5. “We believe that OPEC would eventually be able to put a floor under the oil price, but not until the end of 2009.”

Global oil demand may drop by 700,000 barrels a day next year, with OPEC likely to cut quotas throughout most of 2009, he said. Benchmark New York prices are set to slump to “rock bottom” at the end of next year.

A crude oil price of $30 to $35 a barrel would represent “levels of valuation that we could consider cheap and unsustainable over the medium term for West Texas Intermediate crude oil,” Sieminski wrote.

Deutsche Bank cut its 2009 WTI oil forecast to $47.50 a barrel from $60, reflecting the world economic slowdown and the subsequent impact on oil demand. The estimate for 2010 is $55 a barrel, and $80 a barrel in 2011.

“We are still looking for a sharp recovery in oil in 2011 on the basis that the global economy is likely to be much stronger and oil supply weakened a bit,” Sieminski wrote.

To contact the reporter on this story: Samantha Zee in Los Angeles at szee@bloomberg.net

Last Updated: December 10, 2008 20:41 EST