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Originally published November 27, 2014 at 5:10 PM | Page modified November 28, 2014 at 6:33 AM

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Oil prices sink on cartel’s move

Stocks of major oil producers were in the firing line as their profits are hugely dependent on the price of oil they extract. Royal Dutch Shell, for example, fell 4.3 percent while Total SA dropped 4.1 percent.


The Associated Press

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LONDON — Oil companies saw their shares take a beating Thursday as crude prices slid to their lowest in more than four years after OPEC’s decision to maintain production levels even though prices have fallen sharply in recent weeks.

With U.S. markets closed for Thanksgiving, investors around the world were taking their cue from developments in Vienna, Austria, where the OPEC oil cartel was meeting.

After the decision, the price of benchmark New York crude was down 6.6 percent at $68.80 a barrel while the international benchmark — Brent — slumped 6.5 percent at $72.72. Both are at their lowest levels in over four years.

Unsurprisingly, the stocks of major oil producers were in the firing line as their profits are hugely dependent on the price of oil they extract. Royal Dutch Shell, for example, fell 4.3 percent while Total SA dropped 4.1 percent.

Oil prices have taken a battering this year for a variety of reasons including the return of sustained supplies from countries like Iraq and Libya, the increase in shale gas production, particularly in the U.S., as well as signs of a slowdown in some of the world’s leading economies, notably China and Europe.

Connor Campbell, a financial analyst at Spreadex, said “it will be interesting to see the impact of the OPEC nondecision on the Dow’s record run.” Wall Street trading resumes for a half-day Friday.



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