Shares of Bakken shale oil producers plummet after OPEC decision

OPEC’s poorer nations – Venezuela, Ecuador and Algeria – had led calls at the meeting for a collective cut in production of as much as 5 percent to help boost prices and raise government revenues depleted by plummeting oil tax collections.

On his part, Mr. Kachikwu, who headed Nigeria’s delegation to the meeting, said a more balanced market could be achieved if demand for OPEC crude was increased by 1.2 million barrels per.

“We can not put a number now because Iran is coming, we don’t know when Iran will come, and we will have to accommodate Iran one way or the other”, said Opec Secretary General Abdalla el Badri. The ceiling has been breached routinely by the group.

The decision effectively leaves it up to individual members how much crude to pump and was a strong signal of OPEC’s eroding ability to act as a group in efforts to influence supply, demand – and prices.

That decision upended the oil the market and has seen prices slump by more than 40 per cent to levels last seen in the aftermath of the financial crisis.

He said the downward trend stems mainly from the impact of investment cutbacks and the drop in USA tight oil output, which has been declining since May 2015.

One of the main conditions is for other producers like Russia, Mexico, Oman, Kazakhstan and Iran to cut their output.

“Dialogue and collaboration with consumers, non-OPEC producers, oil companies and investors are essential in reaching our common goal of a more orderly oil market”.

The cartel’s output makes up around 40 percent of the global crude production.

The group’s official communiqué made no mention of its existing output target of 30m barrels a day, saying only that it would continue to “closely monitor developments”.

Failure to reduce the global oversupply could push oil prices $20 lower next year, Venezuelan Oil Minister Eulogio Del Pino warned before the OPEC meeting.

OPEC was not expected to change its unchanged output policy, but nervousness among traders and investors ran high.

“Even if we keep cutting that doesn’t solve anything”, said OPEC President Emmanuel Ibe Kachikwu.

Brent for January settlement slipped 47¢, or 1.1%, to $43.37 a barrel on the London-based ICE Futures Europe exchange.

Indonesia rejoined the group at the meeting, Iraq is increasing production at the fastest rate in the world and Iran’s output will likely increase dramatically once worldwide sanctions are lifted. Oil prices went down with the announcements, dropping to $39.99 per barrel in the US.

“We will be looking at a teeter-totter market”, Daniel Yergin, the Pulitzer Prize-winning oil historian and vice chairman of industry consultants IHS Inc.

Saudi Arabia, the world’s largest oil exporter, is also the cartel’s most influential member.

The Saudis have previously said they would be prepared to consider a cut only if OPEC members Iraq and Iran agreed to cooperate and non-OPEC members such as Russian Federation joined in.