Oil tanks near seven-year low on OPEC decision

US oil prices finished at their lowest level since February 2009 in New York trade as markets continue to reel from OPEC's refusal last week to cut back production.

 

The January contract for West Texas Intermediate crude sank USD 2.32 to USD 37.65 a barrel on the New York Mercantile Exchange, a drop of 5.8 percent. In late-afternoon trade in London today, Brent North Sea crude also was languishing near 2009 lows. 

The Organisation of the Petroleum Exporting Countries - which pumps about 40 percent of the world's crude oil - decided on Friday against cutting output to raise prices. The 13-member OPEC cartel took no action to shore up the market and observers said it appeared to be in disarray. 

"The decision by OPEC members to keep oil production output at record high levels has seen oil prices plummet again," said Sanjiv Shah, chief investment officer of Sun Global Investments.

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