Singapore, Nov 28 (AFP) Oil prices struggled in Asian trade today after the OPEC cartel refused to cut production despite a global glut that has sent prices slumping to four-year lows, with analysts warning of further falls by the end of the year.
US benchmark West Texas Intermediate (WTI) for January delivery was at USD 69.04 a barrel in late-morning trade, down one cent from its settle price in electronic trading in New York on Thursday. US floor trading was closed due to the Thanksgiving holiday.
Brent crude for January turned higher, rising one cent to 72.59.
The Organisation of the Petroleum Exporting Countries, which pumps out one-third of the world’s oil, opted to stick by its output target, even after prices have plunged by 35 percent since June.
The 12-nation cartel “decided to maintain the production level of 30 million barrels per day” where it has stood for three years, it said in a communique after a meeting Thursday at its headquarters in Vienna.
Oil prices were routed after the decision was announced, with WTI tanking to USD 67.75, a level last seen since May 2010, while Brent also plunged to a four-year low of USD 71.25.
“OPEC’s decision to keep output is the main reason for prices to drop quite rapidly,” said Daniel Ang, an investment analyst with Phillip Futures in Singapore.
“Prices are likely to be going down for the rest of the year,” he told AFP.
Ang, who closely tracks the oil market, said he expects WTI to end 2014 in the “low 60s” and Brent in the “mid-60s”.
At yesterday’s OPEC meeting, the cartel came under pressure from its poorer members, including Venezuela and Ecuador, to trim production as tumbling prices were eating into revenues and raising fears over their economies.
But OPEC’s powerful Gulf members led by kingpin Saudi Arabia resisted the calls to turn down the taps unless they are guaranteed market share, particularly in the United States, where cheap shale gas has contributed to the global supply glut. (AFP)