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Oil Prices Plunge as OPEC Holds Firm on Production

Brent crude oil plunged more than $6 a barrel on Thursday after OPEC decided not to cut production despite a huge oversupply in world markets.
Image: This drilling rig is one of thousands seeking oil in the Permian Basin, an oil-and-gas-producing area located in West Texas and part of New Mexico.
From left to right, derrick man Justin Wilson, floor hand Homer Reid, floor hand Tony Spatola (standing behind mud motor), and motor man Patrick Line affix a hole opener and stabiliaer to the bottom hole assembly. Friday, March 1, 2013, in West Texas (Jim Seida / NBC News)Jim Seida / NBC News file

Brent crude oil plunged more than $6 a barrel on Thursday, the sharpest one-day fall since 2011, after OPEC decided not to cut production despite a huge oversupply in world markets. Oil prices have fallen by more than a third since June as increasing production in North America from shale oil has overwhelmed demand at a time of sluggish global economic growth.

Ministers from the Organization of the Petroleum Exporting Countries had been discussing at their meeting in Vienna whether to agree a production cut in an attempt to rebalance the global oil market. Asked whether the oil producer group had decided not to reduce production, Saudi Arabian Oil Minister Ali al-Naimi told reporters: "That is right."

Benchmark Brent futures were down by $4.75 a barrel at $73.00 by 1640 GMT, after hitting a four-year low of $71.25 a little earlier in the session. The contract was on track for its biggest monthly fall since 2008. U.S. crude was at $68.90, down $4.79, after hitting its lowest point since May 2010 at $67.75.

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— Reuters