Markets on Friday hesitated to follow the slide in crude prices after Opec decided not to cut oil production to counter burgeoning shale energy but causing some deep side effects, economists said.

With their precious oil income slipping away, some Opec members like Venezuela and Ecuador had tried in vain to convince fellow oil producers to slash production and force up prices.

But Gulf oil giants held against production cuts. Their aim is to halt the rise of shale oil '“ especially in the huge US market '“ which is more expensive to produce.

'It's a victory for the coalition of countries in the GCC,' said Saxo Banque economist Christopher Dembik.

'They have sufficient foreign currency reserves to support a lower (price) barrel' of crude, he added.

At the same time lower prices will allow Opec to hold its share of the market, which has seen some competition recently from Russia as well as shale oil in the US.

'Today, there is a lot of competition and Opec pumps only 30 per cent of world oil production,' Kuwaiti oil minister Ali Omair said.

'It was inevitable to take the right decision not to cut production because it can be compensated by others present in the market, who have the ability to do so.'

In the future, 'the key role in this looks set to be played by US shale oil producers who will probably face more and more problems at prices below $70 per barrel,' according to analysts at Commerzbank.

US oil output is soaring thanks to fracking, which involves blasting a high-pressure blend of water, sand and chemicals deep underground in order to release hydrocarbons trapped between layers of shale rock.

Even if the US shale production can still hold out with crude around $60 a barrel, Dembik said that 'Saudi Arabia's idea is to dissuade all the research underway in shale in Russia and China.'

'It's good news for the Western economies to have falling oil prices. That could generate a lot more purchasing power than any other measure taken by the government,' said Actions de Lazard Freres Gestion managing director Regis Begue.

However, 'the real victim today is Venezuela,' said Dembik, as the South American country's beleaguered economy depends on oil.

Fears frequently rise that Venezuela could default on its payments but the country's foreign minister, Rafael Ramirez, said the budget has built in $60 a barrel 'and we are ready to cope'.-Reuters