OPEC did not take any action to reduce the supply glut, resisting calls from Venezuela that the rout in prices should be stemmed by the group.
Oil futures dropped to the lowest since 2010.
The group maintained the collective production ceiling at 30 million barrels per day, as reported by Saudi Arabia’s oil minister, Ali Al-Naimi.
According to Bloomberg, Brent crude dropped below $75 per barrel in London after the decision, extending the drop of the year to 33%.
Oil fell into the bear market this year with the US pumping the most in more than three decades and the conflicts in Ukraine and the Middle East failing to disrupt the supply.
Harry Tchilinguirian, head of commodity market at BNP Paribas SA in London said, “OPEC has chosen to abdicate its role as a swing producer, leaving it to the market to decide what the oil price should be. It wouldn’t be surprising if Brent starts testing $70.”
Brent, the global benchmark, is poised for the largest annual drop since 2008. The futures dropped as much as 4.4% after the decision, trading down $2.91 to $74.84 per barrel.
Ali Saleh al-Omar, Kuwait Oil Minister said that OPEC would have to accept any market price while Adel Abdel Mehdi, Iraq’s Oil Minister said, the floor prices for oil would be between $65 to $75 per barrel.
Reuters quoted Olivier Jakob from Petromatrix Consultancy as having said, “We interpret this as Saudi Arabia selling the idea that oil prices in the short term need to go lower, with a floor set at $60 per barrel, in order to have more stability in years ahead at $80 plus.”
He added, “In other words, it should be in the interest of OPEC to live with lower prices for a little while in order to slow down developments projects in the United States.”
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