OPEC Declines Action As World Oil Prices Hit Record Lows

Transcript

ARI SHAPIRO, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Ari Shapiro. You don't usually hear swearing when OPEC countries gather in the refined meeting rooms of Vienna, Austria. But the organization that once dominated world oil markets is now coming to terms with its dwindling clout. Today, OPEC held a highly anticipated meeting while oil prices slipped to a four-year low. NPR's Peter Kenyon sent this story from Vienna.

PETER KENYON, BYLINE: In some ways, it was a throwback to the days when a whisper from an OPEC minister could send prices tumbling or soaring, usually the latter.

When the doors to the meeting room were briefly thrown open, a media contingent unseen in these halls for years charged in. But in a sign of how things have changed for this once dominant group of a dozen oil-producing countries, the questions now had a sting in the tail. If OPEC did cut its supply of oil, would the market even notice?

The oil minister for OPEC's largest producer, Saudi Arabia's Saleh Al-Naimi, was buffeted with questions. But as a television reporter approached, Naimi made it night bluntly clear that he was done answering. Over the relentless clicking of cameras, Naimi advised the reporter to get the hell out of here.

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UNIDENTIFIED REPORTER: May I just ask you one question then, sir?

SALEH AL-NAIMI: No, no, no.

UNIDENTIFIED REPORTER: One question.

NAIMI: Listen to me. Get the hell out of here and go there, OK?

UNIDENTIFIED REPORTER: Why is that, sir?

NAIMI: Just - I don't want to talk to anybody, OK?

KENYON: Nearby, Venezuelan Foreign Minister Rafael Ramirez was a bit more forthcoming. Less well-off OPEC members are hit especially hard by the tumbling oil prices, down almost a third since summer. Analysts have said it would take a cut of at least 1 million barrels a day to affect the markets, and Ramirez was looking to double that.

(SOUNDBITE OF ARCHIVED RECORDING)

RAFAEL RAMIREZ: 2 million, that's our number - our figure.

UNIDENTIFIED REPORTER: What are the chances of OPEC actually reaching that consensus?

RAMIREZ: Well, that's another matter.

KENYON: In the end, OPEC left its 30-million-barrel-a-day ceiling intact. The problem, as Kuwait's oil minister explained, is that if OPEC members cut production and others simply increase their own output, OPEC will be ceding market share without boosting the price. By others, OPEC mainly means the Americans, whose shale oil fracking has put a big dent in OPEC's ability to control prices. Now analysts say the powerful Gulf states that effectively lead OPEC may watch to see if this relatively expensive-to-produce new American oil can withstand a down market. Energy analyst Cornelia Meyer with the MRL Corporation says that's one outcome to watch for.

CORNELIA MEYER: You will obviously see less investment in the sector, especially with the shale oil production. They're very cash flow driven. So if you see less investment there, that will translate pretty quickly in less production in the U.S.

KENYON: In general, analysts say the fundamentals of the market are bound to push prices back up at some point. But for the moment, OPEC seems to be in an uncomfortable position. Only a painfully deep production cut is seen as likely to push up oil prices. But when OPEC takes no action, that can still move prices down. Peter Kenyon, NPR News, Vienna. Transcript provided by NPR, Copyright NPR.