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Oil Prices Drop on OPEC’s Restraint - 28 November 2014

By Cina Coren
Cina Coren is a former Wall Street broker and financial advisor. She holds a Master's degree in Communications and spent many years writing for international news outlets and journalistic publications. Today, Cina spends most of her time writing internet articles and blogs, and reading various newspapers to stay on top of the news.

Oil prices, oil-related shares and oil-linked currencies all tumbled in Asia on Friday, in the wake of OPEC's decision to refrain from cutting output despite a huge oversupply.

U.S. markets were closed on Thursday for the Thanksgiving holiday, leaving the spotlight on the Organization of Petroleum Exporting Countries' meeting in Vienna where Saudi Arabia blocked calls from poorer cartel members to cut production to stem a slide in global prices.

"OPEC is clearly signaling that it will no longer bear the burden of market adjustment alone and this decision puts the onus on other producers," Barclays analysts said in a note.

Crude prices had been under pressure ahead of the meeting, but the sharp dive afterward - the largest since 2011 - showed the decision was not fully priced in.

Brent crude LCOc1 stood at $72.60 a barrel after settling at a four-year closing low on Thursday, poised to fall more than 15 percent for its steepest monthly decline since November 2008. U.S. crude CLc1 was last down 6.5 percent at $68.93.

MSCI's broadest index of Asia-Pacific shares outside Japan slumped 0.7 percent, on track for a weekly gain of nearly 1 percent but a monthly loss of about 1.6 percent.

Australian shares dropped 1.6 percent as energy companies took a hammering, with Sundance Energy (SEA.AX), Drillsearch (DLS.AX), Santos Ltd (STO.AX) falling 10-16 percent.

The Nikkei stock average bucked the regional downtrend and added 0.9 percent, on track for a slight weekly gain and a hefty monthly gain of over 6 percent.

Cina Coren
About Cina Coren
Cina Coren is a former Wall Street broker and financial advisor. She holds a Master's degree in Communications and spent many years writing for international news outlets and journalistic publications. Today, Cina spends most of her time writing internet articles and blogs, and reading various newspapers to stay on top of the news.
 

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