OPEC meeting ends without deal on oil production
OPEC oil ministers ended a meeting Thursday without reaching any kind of consensus on regulating the price and supply of crude, a result that triggered an immediate drop in energy markets.
As the ministers gathered in Vienna, comments by some suggested that the oil cartel would send a message of unity on regulating the market after not being able to do so for years.
But a statement read at the end of their meeting made no concrete pledges, emphasising only the need for members to work for a stable market.
The price of oil fell sharply upon the news at midmorning Thursday. The United States benchmark crude was down 81 cents, or 1.7 per cent, to US$48.20 a barrel in New York. Brent crude, which is used to price international oils, was down 56 cents, or 1.1 per cent, at US$49.16 a barrel in London.
Production ceilings ignored
For decades, the 13-nation cartel was able to regulate prices by throttling or increasing production. But attempts to impose production ceilings have foundered over recent years, with countries ignoring them and producing as much as they wanted or could. And outside players increasing their market share, recent meetings have failed to reimpose unity.
Thursday's events suggested that OPEC the Organisation of Petroleum Exporting Countries - was no closer to reasserting its unity and restoring its image as the major player in determining oil prices for the rest of the world.
One idea was to abandon a firm production target. Experts say OPEC countries could have agreed on a sliding ceiling that could shift between two benchmarks, both above 30 million barrels a day.
That could address Iranian resistance to curbing its output. Since the lifting of nuclear-related sanctions this year, Iranian production has roared back to nearly four million barrels a day, around the same level as before the imposition of the sanctions.
But the ministers were unable even to reach such a more flexible agreement.
The ministerial gathering came amid a recent recovery in the price of oil. Since touching a 13-year low early this year, it has rallied almost 90 per cent to around US$50 a barrel.