OPEC's decision to cede no ground to rival producers underscored the price war in the crude market and the challenge to U.S. shale drillers. The 12-nation group abandoned its role as a swing producer, ignoring the steepest slump in oil prices since the global recession to keep its output target unchanged.
West Texas Intermediate fell from the lowest price in more than four years as Saudi Arabia’s oil minister said the price will stabilize by itself, while the United Arab Emirates said OPEC will do what it takes to balance the market.
A funny thing happened on the way to the OPEC meeting. As a result of a pre-meeting between Saudi Arabia, Russia, Mexico and Venezuela it wasexpected that those countries were on the way to finalize a deal to cut production--then it all somehow fell apart.
Oil ministers from Kuwait and Algeria dismissed possible production cuts as crude’s slump to a four-year low prompted Venezuela to call for an emergency meeting of the Organization of Petroleum Exporting Countries.