Sector Snap: Oil stocks fall after OPEC meeting

Crude prices and oil stocks fall as OPEC ministers leave production target unchanged

Associated Press

NEW YORK (AP) -- Oil stocks fell Friday as OPEC oil ministers left production targets unchanged and delayed decisions on what to do about growing U.S. shale-oil output.

OPEC kept production at 30 million barrels per day despite ample supplies, an indication that members of the 12-nation cartel will be satisfied if the price of internationally traded oil stays around $100 a barrel.

Brent crude fell $1.80 to $100.39 in London. In New York, U.S. crude oil futures fell $1.64 to $91.97.

Shares of Exxon Mobil Corp. closed down $1.62 at $90.47; Chevron Corp. fell $2.36 to $122.75; ConocoPhillips fell 94 cents to $61.34; BP PLC lost 76 cents to $42.91; and U.S. shares of Royal Dutch Shell lost $1.27 to $66.37.

In a statement after their meeting, OPEC ministers signaled that they could reconsider output goals if prices fall sharply, which most analysts consider unlikely.

Oil from domestic shale has helped boost U.S. production, which affects the Organization of the Petroleum Exporting Countries. If forecasts of future shale oil production in the U.S. and Canada prove correct, it could reduce U.S. dependence on OPEC oil and weaken the cartel's power to affect prices.

A Citi analyst said the OPEC meeting was not likely to achieve much, and that many signs point to downward pressure on oil prices.

"The combination of the ongoing supply surge in North America and tepid global demand growth is allowing a buffer of spare capacity to re-emerge and pressuring prices lower," analyst Seth Kleinman wrote in a note to clients.

Prices for internationally traded oil have fallen in 2013 despite the run-up in stocks and easier monetary policy from officials in the U.S., Japan and elsewhere.

Demand has been weakened because of recession and high unemployment in Europe and sluggish economic growth in other parts of the world. The U.S. economy grew at a modest 2.4 percent annual rate in the first quarter. When economies are weak, fewer goods are shipped, which reduces use of gasoline, diesel and jet fuel.

View Comments (6)