Opecfailed to agree on crude production for the first time in at least 20 years, with six members opposing a Saudi Arabian push to increase output, sending oil prices above $101 a barrel.
"It was one of the worst meetings we've ever had," Saudi Oil Minister Ali al-Naimi said as representatives of the 12- member Organisation of Petroleum Exporting Countries left the meeting in Vienna yesterday after five hours of talks. "We were unable to reach an agreement."
Crude in New York jumped 2.7 per cent in the 20 minutes after the meeting ended. The split underscores growing divisions within the group that accounts for about 40 per cent of the world's crude.
Saudi Arabia, Kuwait, Qatar and the United Arab Emirates proposed increasing group output by 1.5 million barrels a day to 30.3 million barrels. They were blocked by members including Iran and Venezuela, which warned of a "collapse" in prices.
Crude for July delivery rose as much as 73 cents to $101.47 a barrel in electronic trading on the New York Mercantile Exchange. The contract climbed $1.65 yesterday to $100.74, the highest settlement since May 31st. Prices are up 36 per cent the past year.
Besides Iran and Venezuela, Opec members opposing a higher production ceiling were Libya, Angola, Ecuador and Algeria. Venezuela was concerned crude prices would tumble if Opec ncreased quotas, the country's oil minister said in an interview with state television.
"There was a proposal to raise output by between 1.5 million barrels a day and 2 million," Rafael Ramirez said. "We, given the uncertainty in the market, thought that could cause the price of oil to collapse."
Bloomberg
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