OPEC's decision to cede no ground to rival producers underscored the price war in the crude market and the challenge to US shale drillers.
The 12-nation group abandoned its role as a swing producer, ignoring the steepest slump in oil prices since the global recession to keep its output target unchanged.
Thursday's decision in Vienna propelled oil futures to the lowest since 2010, a level that means some shale producers may lose money.
"We are entering a new era for oil prices, where the market itself will manage supply, no longer Saudi Arabia and OPEC," said Mike Wittner, the head of oil research at Societe Generale in New York.
"It's huge. This is a signal that they're throwing in the towel. The markets have changed for many years to come."
The fracking boom has driven US output to the highest in three decades, contributing to a global surplus that Venezuela has estimated at 2 million barrels a day.
That's equal to or more than the production of six OPEC members.
Demand for the group's crude will fall every year until 2017 as US supply expands, eroding its share of the global market to the lowest in more than a quarter century, according to the group's own estimates.
Benchmark Brent crude fell by the most in more than three years after the OPEC decision.
Futures for January settlement fell 6.7 per cent to $US72.58 in London late Thursday after trading as low as $US71.25. Prices peaked this year at $US115.71 in June.
Market Signals
"We will produce 30 million barrels a day for the next 6 months, and we will watch to see how the market behaves," OPEC Secretary-General Abdalla El-Badri told reporters in Vienna after the meeting.
"We are not sending any signals to anybody, we just try to have a fair price."
Conventional oil producers in OPEC can no longer dictate prices, United Arab Emirates Energy Minister Suhail Al-Mazrouei said in an interview in Vienna this week.
Newcomers to the market who have the highest costs and created the glut should be the ones to determine the price, he said.
"That is what OPEC is hoping for," said Carsten Fritsch, a commodity analyst at Commerzbank in Frankfurt. "It's the question of who will blink first."
OPEC will feel pressure too, with prices now below the level needed by nine member states to balance their budgets.
OPEC Weakness
"They haven't taken collective action," said Richard Mallinson, an oil analyst at London-based Energy Aspects. "That doesn't mean they won't do it in the next few months if prices stay low."
Venezuela's oil income has fallen by 35 per cent, President Nicolas Maduro said on state television this month.
Yields on the nation's benchmark bonds due in 2027 reached a six-year high this month, while foreign-currency reserves are close to an 11-year low.
Nigeria increased interest rates for the first time in three years this week and devalued its currency. The government is planning to cut spending by 6 per cent next year, according to Finance Minister Ngozi Okonjo-Iweala.
Shale Crash
US oil production rose to 9.077 million barrels a day last week, the highest level in weekly data from the Energy Information Administration going back to 1983.
Output will grow to 9.4 million next year, the most since 1972, it forecasts.
The boom has been driven by a combination of horizontal drilling and hydraulic fracturing which has unlocked supplies from shale formations including the Bakken in North Dakota and the Eagle Ford in Texas.
The technique is typically more expensive than pumping from conventional reservoirs.
Middle Eastern exporters including Saudi Arabia, Iran and Iraq can break even at about $US30 a barrel, Sanford C. Bernstein & Co. said in a report last month.
Some US. producers need more than $US80 and output growth will start to slow with prices below that level, it said.
OPEC's policy will spur a crash in the US shale industry, Leonid Fedun, vice president and board member at Lukoil, Russia's second-largest oil producer, predicted in an interview before the group's decision.
"In 2016, when OPEC completes this objective of cleaning up the American marginal market, the oil price will start growing again," said Fedun. "The shale boom is on a par with the dot-com boom. The strong players will remain, the weak ones will vanish."
'Over to you, America'
Ministers from Russia, Mexico, Venezuela and Saudi Arabia met in Vienna on Tuesday.
The meeting was the result of weeks of diplomacy by Venezuelan Foreign Minister Rafael Ramirez, who was attempting to coordinate with producers outside OPEC to halt the collapse in oil prices.
Yet they failed to reach an output accord.
Igor Sechin, the boss of Russia's largest oil producer Rosneft, said after the meeting that his nation wouldn't need to cut output even below $US60.
"The question is, what price level will be low enough to slow US production growth?" said Torbjoern Kjus, an analyst at Norwegian bank DNB. "What price will get US growth to slow to 500,000 barrels a day from this year's rate of 1.4 million barrels?"
Only about 4 per cent of US shale production needs $US80 or more to be profitable, the Paris-based International Energy Agency says.
Most production in the Bakken formation, one of the main drivers of shale oil output, remains profitable at or below $US42 a barrel, it estimates.
The agency expects US supply to grow by almost 1 million barrels a day next year, with increasing flows to international markets.
"OPEC's decision means it is over to you, America," concludes Miswin Mahesh, a London-based commodities analyst at Barclays.
"This opens the window for the US to be the new swing producer."
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