BRENT crude shed more than $3 to a fresh four-year low under $75 a barrel yesterday after Opec decided not to cut production, despite a huge oversupply in world markets.
Benchmark Brent for January was down by $2.96 at $74.79 a barrel (R5.16 a litre) in London in the afternoon, after hitting a low of $74.36, its lowest since August 2010. US crude was at $71.07, down $2.62.
Asked whether the oil producer group had decided not to reduce production, Saudi Arabian Oil Minister Ali al-Naimi told reporters: “That is right.”
Oil prices have fallen by more than a third since June as increasing production in North America from shale oil has overwhelmed demand at a time of sluggish global economic growth.
“Oil prices are now completely in the hands of the market,” Dominic Chirichella, the director of the Energy Management Institute in New York said.
The cartel would meet again in June next year, an Opec delegate said. – Reuters