US oil prices open $4.40 lower following OPEC meeting
US oil prices sank more than $4 in opening trade Friday, a day after OPEC decided to not cut production in response to lower prices.
Near 1400 GMT, US benchmark West Texas Intermediate for delivery in January stood at $69.29 a barrel on the New York Mercantile Exchange, $4.40 below the closing price Wednesday.
The NYMEX was closed Thursday for a holiday, but in electronic trading WTI had slumped as low as $67.75.
Friday’s decline amounted to a new four-year low for US crude prices, which have lost more than 30 percent of their value since June amid an uncertain outlook for global economic growth and petroleum demand.
The Organization of the Petroleum Exporting Countries, as widely expected, maintained its current production quota at a meeting Thursday at the cartel’s Vienna headquarters.
Some analysts had predicted OPEC might agree to tighten its compliance with the existing quota of 30 million barrels per day, even if a cut to the overall production ceiling was not enacted. OPEC producers pumped 30.6 million barrels per day last month, according to the International Energy Agency.
But OPEC stopped short of even a concrete promise to reign in overproduction.
The group referenced its concern over “the rapid decline in oil prices in recent months” in its official statement. But it also highlighted the need for “stable oil prices at a level which did not affect global economic growth but which, at the same time, allowed producers to receive a decent income and to invest to meet future demand.”
OPEC Secretary-General Abdullah El-Badri said the cartel would sit tight before the next output meeting scheduled for June in Vienna.
“We have to wait and see how the market will settle,” he told the meeting’s closing press conference.
“As I said many times… we don’t want to panic.”