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OPEC will ride out weak prices

Thursday, November 27, 2014 - 01:27

Gulf oil producers led by Saudi Arabia have won the case for keeping OPEC output unchanged, overriding calls from some members of the exporters' group for action to halt a slide in crude prices. Ciara Lee reports.

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Overulling calls from poorer members of the group for action to halt a slide in crude prices, OPEC decided not to cut output. Crude fell to its lowest level since 2010 after the announcement. (SOUNDBITE) HASAN A HAFIDH HAMID, HEAD PR AND INFORMATION DEPARTMENT, OPEC, SAYING: "In the interest of restoring market equilibrium, the conference decided to maintain the production level of 30 million barrels a day as was agreed in December 2011." Crude has fallen 30 percent in the past six months, partly down to the U.S. shale boom, but also because of slower economic growth in China and Europe. The decision from the gulf oil producers, led by Saudi Arabia was no surprise, but it was a blow for the Rouble. No country is suffering more from the decline than Russia, the world's biggest crude producer. It's could lose billions of dollars a year from the low prices. Neil Atkinson from Lloyds List Intelligence. (SOUNDBITE) (English) Neil Atkinson, Head of Analysis, Lloyds List Intelligence, saying (English): "Russia clearly cannot sustain it's economy if prices were to go down dramatically lower and indeed sanctions were to tighten so Russia's in a very difficult situation." OPEC accounts for a third of global oil output - cutting it would lose further market share to North American shale producers. The 12-member group could now face a price war. But consumers will certainly welcome it and so could much of the world economy, which is benefitting from the low prices.

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OPEC will ride out weak prices

Thursday, November 27, 2014 - 01:27