OPEC oil levels stay as meeting divided
Source: Agencies |
June 9, 2011, Thursday
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Print Edition
Print Edition
OPEC unexpectedly decided to leave its production levels unchanged yesterday, with senior officials saying their meeting ended in disarray - a stunning admission for an organization that places a premium on consensus decision making.
OPEC officials said the lack of agreement meant that the cartel will maintain present output ceilings with the option of meeting within the next three months for a possible production hike.
"We are unable to reach consensus to ... raise our production," OPEC Secretary General Abdullah Al-Badri said, in comments reflecting unusual tensions in the 12-nation Organization of Petroleum Exporting Countries whose headquarters is in Vienna.
Analysts covering OPEC for more than 20 years said they could not remember any other time that the normally closed group had admitted to such divisions in its ranks.
Oil prices surged on the news. Benchmark crude for July delivery gained US$1.25 to US$100.34 per barrel in morning trading on the New York Mercantile Exchange after trading lower ahead of the OPEC meeting.
Saudi Arabia and other influential Gulf nations had pushed to increase production ceilings to calm markets and ease concerns that crude was overpriced for consumer nations struggling with their economies. Those opposed were led by Iran, the second-strongest producer within the OPEC.
While the Saudis and the Iranians are frequently at loggerheads over pricing, past meetings normally fell in behind Saudi Arabia, which produces the lion's share of OPEC output. But this time, the Saudi-Iranian rivalry combined with major political and economic uncertainties to lead to deadlock.
OPEC officials said the lack of agreement meant that the cartel will maintain present output ceilings with the option of meeting within the next three months for a possible production hike.
"We are unable to reach consensus to ... raise our production," OPEC Secretary General Abdullah Al-Badri said, in comments reflecting unusual tensions in the 12-nation Organization of Petroleum Exporting Countries whose headquarters is in Vienna.
Analysts covering OPEC for more than 20 years said they could not remember any other time that the normally closed group had admitted to such divisions in its ranks.
Oil prices surged on the news. Benchmark crude for July delivery gained US$1.25 to US$100.34 per barrel in morning trading on the New York Mercantile Exchange after trading lower ahead of the OPEC meeting.
Saudi Arabia and other influential Gulf nations had pushed to increase production ceilings to calm markets and ease concerns that crude was overpriced for consumer nations struggling with their economies. Those opposed were led by Iran, the second-strongest producer within the OPEC.
While the Saudis and the Iranians are frequently at loggerheads over pricing, past meetings normally fell in behind Saudi Arabia, which produces the lion's share of OPEC output. But this time, the Saudi-Iranian rivalry combined with major political and economic uncertainties to lead to deadlock.
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