The organisation of the Petroleum Exporting Countries (Opec) opted yesterday against reducing oil production even though prices have been falling, a decision that sent oil far below the psychologically significant US$75-per-barrel mark.

It was too early to rush into taking action, said Abdalla Salem el-Badri, secretary general of Opec. He referred to oil speculators in adding that the price decline was not due solely to shifting supply and demand.

“We have to wait and see how the market is settling,” he said.

Oil ministers from the 12-nation cartel met in Vienna to discuss what to do about oil prices, which have fallen from above US$110 since June because of increasing production of US shale oil and sluggish global economic growth.

After their decision, the benchmark price for Brent oil slipped to US$71.30 per barrel, the lowest rate in four years.

The decision to stick to Opec’s current production limit of 30 million barrels per day came about as wealthy members Saudi Arabia, Kuwait, Qatar and the United Arab Emirates successfully blocked attempts by countries such as Venezuela to prop up oil prices and revenues.

“They simply said, ‘We can still live with this price’,” Britain-based energy analyst Cornelia Meyer said about the Gulf countries’ position.

“Even if Opec decided to cut a little, it would not help the oversupply in the market,” Kuwaiti Oil Minister Ali Saleh al-Omair said, adding that a reduction was “not only the responsibility of

Opec.”

He was referring to other oil producers. A meeting on Tuesday in Vienna of oil ministers from Russia, Mexico and a few Opec countries ended without a decision to pump less oil.

Al-Omair argued in the meantime that low prices could boost the global economy, which would drive oil demand over time.

Meyer also saw benefits, saying Opec’s decision will help it win market shares from US competitors that use costlier production methods and, therefore, depend on higher sales prices.

Saudi Arabia this month offered a special discount to its US oil clients, which analysts have interpreted as a move to outprice shale oil.

Opec countries such as Venezuela, Iraq and Iran, whose economies are heavily dependent on oil revenues, would have profited from reducing oil supplies.

Venezuelan Foreign Minister Rafael Ramirez said earlier yesterday that he would support a cut of Opec’s self-imposed production limit.

‘A price that is good for everybody’

“We need a price that is good for everybody,” he said before the conference started, adding that he aimed for a price of US$100 per barrel.

However, some Opec members, including Iran, were not ready to participate in an overall reduction. In the case of Iran, sanctions related to the country’s nuclear programme have already diminished its oil output, Teheran’s petroleum minister, Bijan Namdar Zangeneh, argued.

These tensions within Opec were apparent in its official statement, which noted concern about falling prices, urged a price that guarantees economic growth as well as a decent income for producers, and then concluded with the decision to stick to the current production level.

“Why are you concerned?” el-Badri said when asked to explain this line of argument. “If the price comes down, will that not help you fill your car?”

- dpa