US crude and brent oil prices recover losses after Opec holds production

Jessica Morris
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Oil prices have fallen from over $100 per barrel in June last year, to around $50 per barrel today (Source: Getty)

Oil prices recovered losses this afternoon, as the Organisation of Petroleum Exporting Countries (Opec) decided not to cut production at its key meeting in Vienna.

Opec members seemingly failed to agree on an oil production ceiling, after the final statement was published with no mention of a new one, apparently allowing members to continue pumping oil at current rates.

The group's secretary general Abdullah al-Badri said the body could not agree on any figures because it could not predict how much oil Iran would add to the market next year.

The global benchmark, Brent was, down 1.1 per cent to $43.37 per barrel, having shed around two per cent earlier today amid reports the group would raise the ceiling.

Prices have fallen from over $100 per barrel in June last year, to less than $45 per barrel today. This would normally prompt Opec to cut production to decrease supply and increase prices.

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However, the oil cartel has held production to defend its market share from the US shale gas industry which has higher production costs, and finds it harder to operate in a low oil price environment.​

Market mavens had widely expected Opec to maintain its current production target. However some suggested it could be raised given Indonesia's re-entry to the group, and Iran's return to the market.

Poorer members such as Venezuela and Algeria had been pressuring Opec's wealthier members, led by Saudi Arabia, to curb supply and spark prices.

But Saudi Arabia has previously said that it would only consider cutting production if Opec members such as Iraq and Iran agreed to cooperate, as well as non-Opec producers such as Russia.

"We have said on more than one occasion, we are willing to cooperate with anyone who can balance the market," Saudi Arabian oil minister, Ali al-Naimi, said.

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