London: Brent crude oil plunged more than $6 a barrel on Thursday, the sharpest one-day fall since 2011, after OPEC decided not to cut production despite a huge oversupply in world markets.
Asked whether the oil producer group had decided not to reduce production, Saudi Arabian Oil Minister Ali al-Naimi told reporters: "That is right."
Oil prices have fallen by more than a third since June as increasing production in North America from shale oil has overwhelmed demand at a time of sluggish global economic growth.
Ministers from the Organization of the Petroleum Exporting Countries had been discussing at their meeting in Vienna whether to agree a production cut in an attempt to rebalance the global oil market.
Benchmark Brent futures were down by $4.75 a barrel at $73.00 by 1640 GMT, after hitting a four-year low of $71.25 a little earlier in the session. The contract was on track for its biggest monthly fall since 2008.
US crude was at $68.90, down $4.79, after hitting its lowest point since May 2010 at $67.75.
Kuwaiti Oil Minister Ali Saleh al-Omair said there would be "no change" to OPEC's existing oil production target following the meeting.
The cartel will meet again in June next year, said an OPEC delegate.
"Oil prices are now completely in the hands of the market," Dominic Chirichella, director of New York-based Energy Management Institute, told Reuters Global Oil Forum.
Oil analysts said the OPEC decision left the oil market vulnerable to much bigger falls as abundant supply of high quality, light crude oil flooded world markets, much of it from shale oil in North America.
"Saudi Arabia and OPEC will have to live with a prolonged period of low prices for any dent in US-shale or production levels to happen," said Harry Tchilinguirian, senior strategist at BNP Paribas in London.
Ehsan Ul-Haq, senior oil market consultant at KBC Energy Economics, in Vienna for the OPEC meeting, said he expected oil prices to stay under $80 a barrel for some time.
"The probability of oil prices going below $70 a barrel is 20 per cent, remaining in a range of $70-80 a barrel is 40 per cent," he said.
Oil companies were not spared the pain, with the sector's share index on the London stock market declining by more than 4 percent following the OPEC decision.
Copyright: Thomson Reuters 2014