Nine days of tense oil price negotiations by the Organization of Petroleum Exporting Countries ended inconclusively today, and prices immediately declined sharply.
On the New York Mercantile Exchange, West Texas intermediate -- the benchmark U.S. crude -- for May delivery tumbled $2.94 to $11 a barrel after the OPEC talks broke off and then recovered somewhat to $12.20 a barrel.
On the North Sea market, a cargo of Britain's principal Brent crude for July dropped $2.10 to $11.40 a barrel from late trades Friday.
The OPEC delegates scheduled a new meeting for April 15 in a fresh attempt to agree on restraining production to shore up crude oil prices, which have fallen nearly 60 percent since December. But as the ministers of the 13 OPEC nations left today, there was no indication that they had solved their differences.
Attempts to persuade non-OPEC producers to join in production cuts also appeared to have failed. Meetings last week with five independents -- Angola, Egypt, Malaysia, Oman and Mexico -- ended inconclusively after the five insisted that OPEC match any cutbacks with reductions of their own.
OPEC's failure to reach agreement reflected the bitter distrust now dividing its members and the growing clout of the non-OPEC oil producers who have ignored pleas to cooperate in sharing the market.
Saudi Arabia and other Persian Gulf sheikdoms, who triggered the price war by boosting output late last year, are reluctant to accept cuts in their production quotas because they feel that more desperate countries will try to pump more oil than their share or to steal customers by offering discounts.
Besides the erosion of OPEC discipline caused by such tactics, Saudi Arabia no longer appears willing to tolerate sharp losses in production and income to manage fluctuations in the world oil market.
The deep recession among the oil-rich gulf states has made them acutely aware of their political vulnerability, and it is widely believed that the Saudi royal family has vetoed further sacrifices for OPEC until the country's finances are back in shape.
Meanwhile, the major producers outside the cartel, such as the Soviet Union, Britain and Norway, refuse to join in plans to curtail oil supplies as a way to soak up the glut and drive up prices. As long as they reject cooperating with the cartel, OPEC members will be forced to bid against them in a protracted price war or to accept a shrinking share of the market -- something that many of them no longer can afford to accept.
United Press International reported that some industry analysts predict that oil prices will dip further as a result of the failed Geneva talks.
"The possibility of prices on the spot market, where oil is sold to the highest bidder, going down to $8 or $10 a barrel is very real until OPEC starts talking again in mid-April," said Alvin Silber, an analyst at Brean, Murray, Foster Securities Inc. in New York.
But Silber and some other analysts expect OPEC, which is losing more than $200 million a day in revenues, to come up with an agreement soon to restrain output and stabilize price in the $15 to $18-a-barrel range.
Today's final session ended with the OPEC president, Arturo Hernandez Grisanti of Venezuela, and several other ministers slipping out of the hotel without responding to questions. The usual closing news conference by the cartel president was canceled without explanation.
While there was some agreement among the 13 OPEC members here that daily output should be cut from the current estimate of 17 million barrels a day, a compromise plan drafted by Indonesian Oil Minister Subroto failed to win agreement.
Subroto proposed a drop from 17 million to 14 million barrels a day, with Saudi output -- by far the largest component of OPEC's production mix -- cut by 20 percent during the second quarter of the year. This would reduce the Saudi quota to about 3.5 million barrels a day from the currently permitted 4.35 million.