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Oil prices hit fresh four-year lows in wake of Opec meeting | Oil prices hit fresh four-year lows in wake of Opec meeting |
(about 3 hours later) | |
Oil prices hit a four-and-a half-year low in the wake of the decision by the Opec producers' cartel not to cut output. | |
Brent crude fell $2.43 to $70.15 a barrel on Friday. The last time Brent crude was priced this low was May 2010. | |
U.S. crude settled down $7.54 at $66.15 a barrel. | |
The price of Brent dived by more than $5 a barrel on Thursday after Opec announced no change to its production plans following a meeting in Vienna. | |
The 12 Opec members decided to maintain production at 30 million barrels per day, as first agreed in December 2011. | The 12 Opec members decided to maintain production at 30 million barrels per day, as first agreed in December 2011. |
"There's a notion that yesterday's selling was overdone, but not everyone is fully back to work yet after Thanksgiving," said John Kilduff, partner at energy hedge fund Again Capital in New York. | |
He predicted the US benchmark oil future would continue to decline further. | |
'Welcome to the new world' | |
The price of Brent crude has now fallen by more than a third since June, with sluggish global demand and rising production from the US being blamed for the decline. | The price of Brent crude has now fallen by more than a third since June, with sluggish global demand and rising production from the US being blamed for the decline. |
"Welcome to the new world of oil," said Michael Wittner, senior oil analyst at Societe Generale. | "Welcome to the new world of oil," said Michael Wittner, senior oil analyst at Societe Generale. |
"Saudi Arabia and Opec will no longer be the mechanism to balance the market, they have relinquished that role. | |
"Instead, the market itself - prices, in other words - will be the mechanism to rebalance the market. We cannot overstate what a dramatic and fundamental change this is for the oil market." | "Instead, the market itself - prices, in other words - will be the mechanism to rebalance the market. We cannot overstate what a dramatic and fundamental change this is for the oil market." |
The falling oil price continued to hit shares in energy stocks on Friday, with shares in oil giants BP, Royal Dutch Shell and Total all down by more than 3%. | |
Shares in airline companies, however, rose on hopes that they will face lower fuel bills. | Shares in airline companies, however, rose on hopes that they will face lower fuel bills. |