Oil falls as Saudis threaten to walk away from output talks
Oil slid below $46 (€43.3m) a barrel as OPEC members failed to bridge differences on production cuts, while a rally in metals fizzled.
US stocks were little changed, with major indexes hovering near all-time highs. Crude slid as Iraq and Iran raised objections over the distribution of output reductions and Russia said it was not planning to attend crucial talks with the Organization of Petroleum Exporting Countries today.
"The oil price is shaky as well as oil-related companies," said Herbert Perus, head of equities at Raiffeisen Capital Management in Vienna, which manages €30bn.
"We have a very important OPEC meeting and there's a flow of expectations in front of this meeting."
For decades, Saudi Arabia has had its way at OPEC.
As OPEC ministers gathered for today's meeting, Saudi Arabia was trying to reassert its authority by hinting it was prepared to walk away from the negotiations.
Genuine warning or bluff, Tehran and Baghdad may be willing to take the risk. Both have seen the Saudis gain market share and neither is as dependent on oil prices as Riyadh.
"Iran and Iraq have assumed that Saudi Arabia will cut unilaterally because it wanted higher prices and thought they could put the Saudis into a corner," Amrita Sen, chief oil analyst at Energy Aspects, said.
"Riyadh has effectively said it isn't in a corner and will not do a deal unless everyone else contributes."
On Monday an OPEC committee charged with determining where production cuts should fall made little progress as the Saudis demanded Iran was barred from raising output further. (Bloomberg)