OPEC Oil Price Fell to Four-Year Low

By Sarah Kent

LONDON--The average price of oil produced by members of the Organization of the Petroleum Exporting Countries fell to a four-year low on Tuesday, as news that Saudi Arabia had cut the price of its oil for U.S. buyers triggered a rout in oil prices.

OPEC's daily basket tumbled to $78.67 a barrel, down almost $2 a barrel from Monday, according to data published by the Secretariat on Wednesday. That level hasn't been touched since October 2010.

It reflects a drop of more than 20% from the average price of $101.58 a barrel so far this year, underscoring the pain facing OPEC members dependent on oil exports for government revenue.

Notwithstanding the steep drop in oil prices, OPEC kingpin Saudi Arabia has so far declined to rein in production, highlighting rifts within the group which has historically cut back output to prop up prices.

Saudi Oil Minister Ali al-Naimi is scheduled to meet with Venezuela's Foreign Minister Rafael Ramirez on the Caribbean resort island of Margarita on Wednesday as the South American nation struggles to endure the sustained drop in prices.

Write to Sarah Kent at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires