Oil Drops 9 Percent As OPEC Stands Pat

New York, NY (AHN) - The price of crude oil tumbled 9 percent to settle at $49.28 a barrel on Monday after OPEC decided over the weekend to leave future production unchanged.

The move surprised markets as it was widely anticipated the group would cut production for the second time in as many months. OPEC implemented a cut in November in an effort to curtail the sliding price of crude oil, but the move has had little success.

"The OPEC meeting last weekend shows you that there's not a lot the group can do to stop the free-fall in oil prices. On top of that, the latest U.S. manufacturing data is playing into the market psychology," said Phil Flynn, analyst for Alaron Trading in Chicago, according to the Associated Press.

"The weakness in the manufacturing sector foretells a bad demand picture for oil," he added.

OPEC will revisit a decision on production cuts during its next meeting on Dec. 17 in Algeria. Some members, such as Saudi Arabia called for better compliance by members on existing cuts before additonal cuts could be effective.

However, OPEC's secretary general said a significant production cut is likely at the meeting.

Crude oil fell $5.15 a barrel on Monday to settle at $49.28, marking its lowest closing price since May 2005.