Brent resumed its decline as an Iranian official predicted a further slump in prices if solidarity among OPEC members falters. West Texas Intermediate in New York also erased Tuesday’s gains.
Brent futures for January fell to a low of $65.54 a barrel, down $1.30, before recovering slightly to trade around $65.90 by 1130 GMT. The contract reached $65.29 on Tuesday, its lowest since September 2009. U.S. crude futures were down $1.07 at $62.75 a barrel.
Crude oil futures fell in the run-up to this week’s OPEC meeting as traders weighed prospects for the first cut in production quotas since 2008.
Prices erased earlier gains after a meeting between Venezuela, Mexico, Saudi Arabia and Russia didn’t produce an agreement on a coordinated oil-output reduction, according to Rafael Ramirez, Venezuela’s Foreign Minister Igor Sechin, who runs Russian state oil producer OAO Rosneft, said a drop in prices below US$60 a barrel wouldn’t force Russia to curb output.
Iran plans to raise oil production “at any cost” to defend the country’s market share and joins calls for an emergency OPEC meeting to help shore up crude prices.
“We will be raising our oil production at any cost and we have no other alternative,” said Oil Minister Bijan Namdar Zanganeh, according to his ministry’s news website Shana. “If Iran’s oil production hike is not done promptly, we will be losing our market share permanently.”
The Organization of Petroleum Exporting Countries (OPEC) today announced that its members could not reach an agreement to change OPEC's production quotas. How significant is that announcement? In my opinion, not very.
Forbes provides these details: