The Organization of Petroleum Exporting Countries (OPEC) decision to not cut oil production at Thursday's meeting in Vienna, Austria, sent the Brent Crude prices tumbling down to a fresh four year low of $72.82 a barrel.
"We don't want to panic. I mean it. We want to see the market, how the market behaves, because the decline of the price does not reflect a fundamental change," Abdallah Salem el-Badri, the general secretary of OPEC was quoted by BBC as saying.
Prices in the US also spiraled down by $4.64 to $69.05 a barrel, as business slowed during the Thanksgiving festival.
The 12-member organization unanimously decided to leave its production of 30 million bpd unchanged. The Saudi Arabian oil minister Ali al-Naimi said that it was a great decision and if all the member countries comply they could eventually lower production by 300,000 barrels a day, according to The Wall Street Journal.
Not Taking Burden
Thursday's decision made one thing clear to the world – the OPEC is not ready to take the burden of adjusting oil prices alone any more.
On the other hand, it could also mean the OPEC is losing foothold of the market.
"It is a new world for OPEC because they simply cannot manage the market anymore. It is now the market's turn to dictate prices and they will certainly go lower," Dr. Gary Ross, chief executive of PIRA Energy Group was quoted by Reuters.
Dampen US Production
OPEC's decision could also be a strategic plan to put a damper on the booming Shale production in the US. Even before the meeting's results could be announced, many US producers said they would cut capital expenditure next year.
The US oil production has gone up to a million barrels per day, which is driving the country toward energy independence. But falling prices and low demand could lower production by 25 percent.
"The Saudis want Opec to remain relevant. The only way in their mind is to subdue the US shale producer," Phil Flynn, an analyst was quoted by the BBC.
But will this game plan really work for OPEC?
According to experts, that is doubtful.
"OPEC may be facing a prolonged period of weak markets for its crude. IHS forecasts that the growth of supply outside of OPEC next year will exceed global demand growth, leaving no room for OPEC countries to increase their production," according to The New York Times.