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Disastrous meeting shows Opec will never again be the force it once was

Published Tue, Dec 8, 2015 · 09:50 PM

AS recently as August 2014, oil prices were just above US$100 per barrel. On Tuesday, they hovered at close to US$40, a roughly 60 per cent drop in 16 months.

After the meeting of the Organization of the Petroleum Exporting Countries (Opec) in Vienna on Friday, oil prices have entered uncharted territory, and perhaps Opec as well.

For the cartel, the marathon seven-hour meeting turned out to be a disaster. All hopes of an output cut to boost prices, for which cash-strapped members such as Algeria, Ecuador, Venezuela and Nigeria had lobbied hard, were dashed. Not only that, the cartel could not agree on any production ceiling at all. As Iran's Oil Minister, Bijan Namdar Zanganeh, put it, "effectively, it's ceilingless. Everyone does whatever they want". What Opec has on its hands then, is a free-for-all battle for market share.

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