Crude prices plunged after OPEC members rejected calls for a drastic cut in their oil output.
Meeting in Vienna, the 12-member Organization of the Petroleum Exporting Countries, which supplies more than a third of the world’s oil, agreed to stick to their production target of 30 million barrels a day, the Wall Street Journal reported.
That implies a production cut of 300,000 barrels a day, which, even if implemented, would just be a small reduction in the global oil supply.
After the cartel’s decision, the West Texas Intermediate benchmark fell below US$70 a barrel for the first time in over four years, while the Brent contract for January fell 6.3 percent to $72.82 a barrel on the ICE Futures Europe exchange.
Currencies of major oil producing countries declined, with the Russian rouble hitting a record low against the euro and nearing an all-time low against the dollar. Shares of major European oil companies plunged.
OPEC secretary-general Abdalla Salem el-Badri voiced confidence that members would “abide by” the group’s production target.
“We don’t want to panic,” the BBC quoted el-Badri as saying. “We want to see the market, how the market behaves, because the decline of the price does not reflect a fundamental change.”
The cartel’s small cut would hardly affect the global oil price amid rising production from the United States and weaker global demand, the Journal said.
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