Brent crude oil fell more than $3 to a fresh four-year low under $75 a barrel on Thursday after the Organization of the Petroleum Exporting Countries (OPEC) decided not to cut production, despite a huge oversupply in world markets.
Asked whether the oil producer group had decided not to reduce production, Saudi Arabian Oil Minister Ali al-Naimi told reporters: “That is right.’’ Oil prices have fallen by more than a third since June as increasing production in North America from shale oil has overwhelmed demand at a time of sluggish global economic growth.
Ministers from OPEC had been discussing whether to agree a production cut at their meeting in Vienna.
Benchmark Brent futures were down by $2.96 a barrel at $74.79 by 1520 GMT, after hitting a low of $74.36, their lowest since August 2010.
U.S. crude was at $71.07, down $2.62.
Kuwaiti Oil Minister Ali Saleh al-Omair said there would be ‘no change’ to OPEC’s existing oil production target following the meeting. The cartel will meet again in June next year, said an OPEC delegate.
Output target at 30 million barrels
OPEC oil ministers have decided to keep their present output target at 30 million barrels a day, despite an oversupply of crude and plunging prices.
The decision on Thursday was expected. OPEC oil power Saudi Arabia had indicated before the meeting that it favoured the status-quo.
The Saudis are the top producers within the 12-nation organisation and effectively decide the cartel’s policy.
Some less well-off members had favoured a cut, to reduce supplies and push prices back up.
But because of booming shale production in the U.S., that would not have made a sizable dent in supply.