London UK | – Oil prices hit a four-year low on Thursday as hopes for an OPEC agreement on the first production cut since the financial crisis grew smaller.
Saudi Arabia, the largest among OPEC members, hinted it would not vote for the cut in output — in a bid to retain market share and hold off competition from U.S. shale production.
Brent crude traded at $75.86 when the key meeting kicked off in Vienna.
Analysts say a cut of around 1.5 million barrels a day would be needed to support oil prices — a move that now seem increasingly unlikely.
The lack of action would be bad news for countries like Russia, Iran and Venezuela, which depend on prices around at least $90 a barrel to meet their economic targets.
Crude oil is down 30% since June and analysts warn prices could fall even more if OPEC fails to reach an agreement on time.
“With indications that OPEC production will remain around 30 million barrels a day, any upside to the price of crude looks very limited,” said senior analyst at FxPro Angus Campbell.
Lower oil prices could also halt the U.S. shale oil boom, as analysts indicated that 40% of the production scheduled for 2015 would be “uneconomic” if prices drop below $80 a barrel.