Oil prices rebound as OPEC maintains output

8th June 2011, Comments 0 comments

Oil prices shot higher on Wednesday after OPEC maintained its output ceiling at a tense meeting in Vienna while the market also digested key energy inventory data from the United States.

Brent North Sea crude for July jumped $1.27 to $118.05 a barrel after the OPEC decision. It had fallen earlier Wednesday ahead of the meeting as traders anticipated that the Organization of Petroleum Exporting Countries would announce an increase in oil production.

After the OPEC meeting, New York's main contract, light sweet crude for delivery in July, rallied $1.73 to $100.82.

OPEC, which has a dozen member countries, kept its official output target at 24.84 million barrels per day (mbpd), where it has stood since January 2009.

However, the cartel is pumping above this level to compensate for OPEC member Libya, whose oil supplies have been ravaged by violent unrest since February.

Traders had speculated that OPEC would announce a boost to production on Wednesday to help cool high oil prices and in turn revive flagging economic growth.

"Unfortunately we are unable to reach a consensus this time to reduce or raise our production," OPEC Secretary General Abdullah El-Badri said after the meeting.

Saudi Arabian Oil Minister Ali al-Naimi, speaking after the decision, said it was "one of the worst meetings" ever staged by OPEC because of differences of opinion between member nations.

"We were not able to reach an agreement" on an increase, said Naimi, who confirmed that the Gulf nations of Saudi Arabia, Kuwait, Qatar and the United Arab Emirates had proposed a production jump of 1.5 mbpd.

"That means we are suggesting production of 30.3 million barrels a day," he said, adding that Algeria, Angola, Venezuela, Iraq, Iran and Libya had rejected such a move.

Also on Wednesday, the US Department of Energy said that crude inventories plunged last week in the United States, which is the world's biggest consumer of oil. However gasoline, or petrol, inventories rose strongly.

© 2011 AFP

0 Comments To This Article