Crude oil costs rise as OPEC meeting concludes without production increase
OPEC talks broke down on Wednesday as government officials were unable to convince the cartel to raise production rates.
The news sent both WTI and Brent crude oil futures higher, and came despite an urgent plea from the International Energy Agency (IEA) to lift production.
“Unfortunately we are unable to reach a consensus to reduce or raise production,” OPEC Secretary General Abdullah El-Badri said, according to news reports.
“This is one of the worst meetings we have ever had,” said Saudi Oil Minister Ali al-Naimi.
Following the announcement, WTI crude futures jumped $1.67, or 1.7%, to $100.76/bbl, while Brent futures rose $1.20, or 1.0%, to $117.88/bbl.
Six countries in the 12-member group were opposed to an increase in output, news agency Reuters reported.
Gulf Arab countries had proposed an increase to 30.3mn bpd, up from current supply of about 29mn bpd.
Saudi Arabia was said to be proposing the largest increase, according to Reuters, while Iran, Venezuela and Algeria refused to consider any hike.
Many countries, including the US, had hoped OPEC would take action to relieve supply pressure that has led to rapidly rising crude prices.
The next scheduled OPEC meeting is on December 14, 2011, though officials said they hoped they could meet again in September as well.
OPEC (Organization of the Petroleum Exporting Countries) is an intergovernmental organization of 12 developing countries made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. It is headquartered in Vienna, Austria.
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