OPEC Price Talks Collapse
A squabble between OPEC and non-OPEC oil producers over production cuts and a rise in last week's crude and distillate inventories dealt a double whammy to crude futures Wednesday, prompting prices to fall back to a low under $20 a barrel.
OPEC's Secretary General Ali Rodriguez said OPEC would cut its 23.2 million barrel per day output quota by 1.5 million barrels per day, emphasizing that OPEC also wants non-OPEC members to cut their output by a total of 500,000 barrels per day.
The cuts would be effective on Jan. 1, but would also require the cooperation of non-OPEC members. A representative at OPEC couldn't confirm the news of the agreement because members were still in a meeting at 2 p.m. Eastern time.
On the New York Mercantile Exchange, crude for December delivery fell to $20.02 a barrel, down $1.65. The contract touched a low at $19.63 earlier in the trading session.
December unleaded gasoline fell 3.31 cents to 54.7 cents a gallon and December heating oil declined 4.33 cents to 56.6 cents a gallon. December natural gas shed 12.8 cents to stand at $2.67 per million British thermal units after a key report said last week's supplies rose by 7 billion cubic feet. In London, Brent crude on the International Petroleum Exchange fell $1.62 to $19.19 a barrel.