Oil Tumbles after OPEC, Russia, Mexico Fail to Agree on Cuts

Oil prices tumbled by more than $1 a barrel on Tuesday to near four-year lows, reversing early gains after a meeting between Saudi Arabia, Venezuela and major non-OPEC oil exporters ended with no deal on curbing output.

 

Saudi Oil Minister Ali al-Naimi met with officials from Venezuela, Russia and Mexico in Vienna before Thursday's summit of the Organization of the Petroleum Exporting Countries amid a drop of roughly 30 percent in oil prices since June.

 

Venezuelan Foreign Minister Rafael Ramirez has been pressing for some kind of deal to revive tumbling oil prices, and the unexpected meeting had briefly raised hopes for an early pact.

 

But crude whipped lower after the meeting broke up with no sign of any accord in the near term, although Ramirez said the four nations agreed that prices below $80 were not good. He said they would meet again in three months.

 

"It's pretty clear from today's meeting that the Saudis don't want a cut and there's not going to be one," said John Kilduff, partner at New York energy hedge fund Again Capital.

 

"The OPEC folks have made a good game so far, running around as though they will respond with a cut. I was steadfast that there would not be a cut, but they even had me nervous."

 

Benchmark Brent crude slumped $1.03 to $78.65 a barrel by 11:36 p.m. EST (1636 GMT), down from an earlier intra-day high of $80.44. U.S. crude fell $1.17 cents to $74.61, drawing near a four-year low of $73.25 touched two weeks ago.

 

Russia, a non-OPEC member, has been pressuring OPEC to slash production, and has offered to give up 300,000 barrels per day of its own output. OPEC heavyweight Saudi Arabia has not said so far if it will agree to any cuts.