Brent crude prices near 4-year low after OPEC decides not to cut oil production

Brent crude oil prices held above US $72 a barrel on Friday, close to a four-year low touched in the previous session after the Organization of the Petroleum Exporting Countries (OPEC) decided against cutting oil production to support prices.

OPEC's decision, which came after Saudi Arabia blocked calls from poorer members of the cartel for output reductions, led to a retreat in oil prices on Thursday.

Saudi Arabia and OPEC had "relinquished" their role to balance the market from the supply side, Societe Generale analysts said in a note on Friday.

"Instead, the market itself - prices, in other words - will be the mechanism to rebalance the market. We cannot overstate what a dramatic and fundamental change this is for the oil market," the analysts said.

Brent crude was down 9 cents at US $72.49 a barrel at 10:16 am, after plummeting US $5.17 in the previous session to close at US $72.58. Earlier on Thursday, the fuel had touched its weakest since July 2010 at US $71.25 a barrel.

Oil prices are headed for their steepest monthly decline since November 2008, after falling more than 15 per cent in November this year.

Brent has lost nearly 40 per cent since June, falling from above US $115 a barrel as increasing shale output in North America created an oil glut amid sluggish global economic growth.

"I think traders realised in looking at the fundamentals that they haven't really changed," said Phin Ziebell, oil analyst at National Australia Bank, said of Thursday's fall.

US crude for January delivery plunged US $4.78 from Wednesday's to US $68.91 a barrel, after earlier dropping to its lowest since May 2010 at US $67.75. US markets were shut on Thursday on account of Thanksgiving day.

US crude has shed almost 15 per cent in November, its biggest monthly drop since May 2012.

Russia's most powerful oil official Igor Sechin said oil prices could fall to US $60 or below by the end of the first half of next year. If prices remained low, Russia had the potential to cut between 200,000 and 300,000 barrels per day of production, Sechin said.

Responding to OPEC's decision, Venezuela President Nicolas Maduro said the country would keep campaigning for output cuts until oil prices rebounded to US $100 per barrel.

A further blow to global oil demand could come on Monday when China releases official Purchasing Managers' Index (PMI) data for November that could show slower growth, according to a Reuters poll.

(Reuters)